..Beans smuggling looms
Ghana’s cocoa farmers, are complaining that they are broke as the cocoa board – to which they are obliged by law to sell their produce – is unable to pay them. The Ghana National Cocoa Farmers Association is beginning to complain.
The farmers say that the board – known as COCOBOD – has not treated them fairly and there is fear that they will soon be smuggling cocoa beans out of Ghana, according to a BBC report.
But COCOBOD, has assured that concrete steps have been taken to ensure it can secure enough funds to finance its annual cocoa purchases in the 2023/2024 crop season.
Against the backdrop of a report by Reuters that the firm had borrowed up to $200 million from cocoa traders to plug its funding gap, COCOBOD said it had adopted a two-prong financing strategy to ensure that it obtained the required funds for the purchasing season.
A statement from COCOBOD in response to the Reuters report indicated that it had had firm assurances from its bankers of making funds available in time for the purchasing season and that a “Cocoa syndicated Loan has been laid in Parliament for consideration and approval.”
Anane Boateng, the president of the Ghana National Cocoa Farmers Association, complained that while his members do all the work and shoulder the costs, COCOBOD seems unable to make a profit.
There are currently worries that some farmers might be forced to smuggle their remaining beans into neighbouring Ivory Coast in order to sell them.
Ghana is the world’s second-largest producer of cocoa and the industry makes up around 15% of the country’s exports.
Cocobod has been losing money for the past six years, according to MP Eric Opoku – who is on the parliamentary committee that oversees the board.
COCOBOD says that it is still trying to secure a loan to pay for the 2023/24 crop, the Reuters news agency reports. But parliament will still need to approve that and there has been a problem because COCOBOD has failed to account for the money it borrowed in 2020, Mr Opoku said.
So far, the board has borrowed money from cocoa traders to pay for its purchases, Reuters reports.
COCOBOD said in a statement that it wanted to “assure our stakeholders that the necessary arrangements have been made to secure enough funding for cocoa purchases for the year under review”.
FINANCING OF PURCHASES FOR 2023/24 CROP SEASON
There have been some recent publications in the news media in relation to funds for cocoa purchases for the 2023/24 Crop Season.
We wish to brief our stakeholders on this very sensitive national issue as follows:
COCOBOD planned a two-prong financing for the 2023/2024 Crop Season to diversify Its source of funding for the annual cocoa purchases.
The strategy was, therefore, to use a pre-financing arrangement with the international buyers to raise an amount of US$400 million for purchases at the beginning of the Season in September 2023.
These initial funds were expected to be augmented by an additional US$800 million loan from a syndicate of lenders by the end of November 2023. After engagements with buyers for several weeks, the arrangement was however discontinued.
Thus, since the beginning of the Season, cocoa purchases have been financed with non-collateralized cocoa sales proceeds. COCOBOD is therefore still in the process of securing the syndicated loan for the 2023/24 Crop Season.
The Board has so far received a firm response from our bankers in this regard, and the Cocoa syndicated Loan has been laid in Parliament for consideration and approval.
We wish to use this medium to assure our stakeholders that the necessary arrangements have been made to secure enough funding for cocoa purchases for the year under review.
ISSUED BY: PUBLIC AFFAIRS DEPARTMENT