Cocoa crop failure spoils Ghana’s name as leader

CONCERNS over Ghana’s management of its cocoa sector, which has been hit by a surprise crop failure this season, had undermined its relationship with the industry and threatened its reputation as the premier supplier of top-quality beans, traders said.

Ghana’s cocoa regulator Cocobod initially forecast production of about 1 million tons for 2014/15, but a host of factors have combined to slash output.

The International Cocoa Organization now predicts that Ghana, the world’s biggest producer behind neighbouring Ivory Coast, will have produced 696 000 tons by the season’s end in September, down more than 22 percent from last year.

Traders believe the shortfall means Ghana will probably be unable to supply about 150 000 to 200 000 tons of cocoa that it has sold and will have to roll those contracts forward to next season.

“Some people have already been hurt and more will be this season. If our estimate of the size of the roll-over is correct, there has to be a general change in attitude,” one New York-based trader said.

Cocobod executives did not respond to requests for comment. They said last week that the downturn was cyclical and Cocobod had responded by increasing farm inputs.

Gold standard

Cocobod’s management of the cocoa sector has been viewed as the gold standard in West Africa and is often credited with Ghana’s explosive growth in output in the 2000s.

Strict quality controls have allowed the country to produce beans that fetch a premium on the world market.

Cocoa Marketing Company, a state-run wholly-owned subsidiary of Cocobod that is charged with selling beans to international buyers, had built up a reputation as a reliable supplier. No longer, traders said. – Reuters