June 13, 2024
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Cocoa output for 2023/24 season drops by 40%, driving record-high prices

According to two sources from Ghana’s cocoa sector regulator, COCOBOD, the anticipated cocoa output for the 2023/24 season is likely to fall significantly short of expectations, with an estimated 40 per cent shortfall from the target of 820,000 metric tons.

Factors contributing to this decline include adverse weather conditions, smuggling activities, illegal gold mining, and the prevalence of swollen shoot disease.

Expressing concerns over the production shortfall, the first source informed Reuters that strong seasonal winds and insufficient rainfall have exacerbated the situation, with the current output forecasted to be about 500,000 tons for the season.

Addressing the challenges, the source noted, ‘Unfortunately, the cause of the decline could not be remedied immediately through human intervention.’

In the previous 2022/23 season, COCOBOD reported a loss of around 150,000 tons of cocoa due to smuggling and illegal gold mining, locally known as galamsey. Additionally, the regulator disclosed earlier this month that the cocoa swollen shoot virus had devastated approximately 500,000 hectares of cocoa farmlands.

Efforts to mitigate the production challenges are underway, according to the first source, who mentioned ongoing farm rehabilitation initiatives, the onset of the rainy season, and collaborative efforts with security agencies to curb smuggling activities.

Despite the current predicament, the second source remains optimistic about Ghana’s potential for production recovery. However, COCOBOD was not available for comment on the matter.

The decline in cocoa production from both Ghana and Cote d’Ivoire, coupled with increasing deficits, has propelled global cocoa prices to record highs.

Traders are experiencing heightened demand and pricing volatility, with London cocoa futures surpassing the psychological barrier of £5,000 and New York cocoa breaching the $6,000 mark.

The surge in cocoa prices is beginning to impact retail markets, with chocolate manufacturers such as Hershey anticipating a slowdown in consumer demand due to escalating costs.

Samuel Adimado, the president of Ghana’s cocoa buyers group, described the current production forecast as ‘shattering,’ noting that member firms are adapting their operations to remain viable in the face of these challenges.

Highlighting the concerning trend, the first source emphasised that rising global cocoa prices have incentivised smuggling activities, potentially leading to even higher losses in the current season.

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