Ghana’s cocoa production for the 2023/24 season is projected to fall nearly 40% below the target of 820,000 metric tons, according to sources within the country’s regulatory body, COCOBOD.
The decline is attributed to adverse weather conditions, smuggling activities, the spread of swollen shoot disease and other factors.
The shortfall in production, now estimated at approximately 500,000 tons for the season, has been exacerbated by factors beyond immediate human intervention, stated the sources.
In the preceding 2022/23 season, COCOBOD reported losses of around 150,000 tons due to smuggling. Moreover, the cocoa swollen shoot virus has decimated approximately 500,000 hectares of farmland, further straining production.
Efforts are underway to mitigate these challenges, including farm rehabilitation initiatives and collaboration with security agencies to curb smuggling activities.
Despite the grim outlook, Ghana retains prospects for production recovery, albeit facing significant hurdles.
The shortfall in Ghana’s cocoa production, coupled with deficits in Ivory Coast, has triggered unprecedented spikes in global cocoa prices. London cocoa futures on ICE and New York cocoa prices have breached significant thresholds, reflecting concerns over widening deficits in the current and upcoming seasons.
These soaring prices are translating to increased costs for consumers, prompting chocolate manufacturers like Hershey to anticipate a slowdown in demand as customers become more price-conscious.
Samuel Adimado, president of Ghana’s cocoa buyers group, described the current production outlook as “shattering,” indicating that member firms are restructuring operations to adapt to the challenging environment. Downsizing and reassignment of staff have become prevalent strategies among industry players.
Furthermore, rising global cocoa prices are incentivizing smuggling activities, potentially resulting in even higher losses this season.
As Ghana grapples with a significant drop in cocoa production, the repercussions are reverberating across global markets, reshaping dynamics within the cocoa industry and prompting stakeholders to strategize for resilience amidst uncertainty.
Source: Reuters
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