The Ghana Cocoa Board (COCOBOD) has pushed back against claims that it is sitting on large volumes of unpaid arrears owed to cocoa farmers, insisting that the current strain in the sector is being driven by financing disruptions and unfavourable global market conditions rather than deliberate non-payment.
Speaking in an interview on Asaase Radio on Wednesday, January 4, Head of Corporate Communications at COCOBOD, Sam Jerome, said public commentary on the issue has oversimplified a much more complex situation.
“It is not entirely the case that this is about unpaid expenses,” Jerome said. “It needs to be explained for people to appreciate the real issues that we are dealing with.”
According to him, COCOBOD’s difficulties stem from a breakdown in its long-standing syndicated financing arrangement, which traditionally underpins cocoa purchases ahead of every crop season.
He explained that the board’s inability to meet certain supply commitments to off-takers during the 2020/2023 seasons weakened confidence and affected access to syndicated loans for the 2024/2025 crop year.
In the absence of the syndicated facility, Jerome said off-takers resorted to pre-financing cocoa purchases but under far stricter terms. These conditions included enforcing old contract prices, compelling COCOBOD to transact through designated local companies, and releasing funds in phases—60 per cent upfront, with the remaining 40 per cent paid only after proof of shipment.
“That security we usually get from the syndicated loan was not available, and that has exposed us,” Jerome said.
Compounding the financing challenge, he noted, is the sharp decline in global cocoa prices. While world market prices currently hover around $4,300 per tonne, Ghana has deliberately maintained a higher producer price to shield farmers from market shocks.
“The farm-gate price still remains about $5,040, and by the time we ship, the cost is no less than $6,300 per tonne,” he said. “International buyers are not willing to absorb that difference.”
Jerome rejected suggestions that the situation amounts to a straightforward liquidity crisis, noting that some licensed buying companies still have access to funds but are exercising caution due to market volatility.
On the question of how much COCOBOD allegedly owes farmers, he declined to provide figures, explaining that payment obligations fluctuate daily depending on volumes purchased and settled.
“It changes constantly. Unless I get proper documentation from the finance department, I cannot respond accurately,” he said.
COCOBOD maintains that it is taking steps to stabilise operations and navigate the difficult global environment, while keeping producer prices intact and safeguarding the incomes of cocoa farmers amid the downturn.
