By Toma Imirhe
Despite continued major challenges still persisting in Ghana’s cocoa industry, recent data suggests that the production target for the current, 2024/2025 season will be met and possibly exceeded. The current target is 617,000 tons, after Ghana revised downwards its erstwhile 650,000 tons target by 20% in December.
However, cocoa arrivals at official Ghanaian warehouses neared 550,000 metric tonnes by end-January, putting the world’s second largest producer – after neighbouring Cote d’Ivoire – within reach of its output target for this season, said a source with access to data from sector regulator Cocobod. This is encouraging news for Ghana which has been heavily reliant on cocoa exports for its foreign exchange needs, but which incongruously suffered a severe earnings slump in 2024, due to sharp falls in official production, just as cocoa prices surged to record highs of over US$10,000 per ton,
According to the source, Ghana’s graded and sealed cocoa arrivals reached 542,223 tonnes as of January 30. This puts production just 74,777 tons short of the (downwardly) revised output target for the 2024/25 season, which runs till end-September. These production figures have been independently verified by three Europe-based cocoa traders who recently told Reuters they had heard Ghana’s G&S cocoa arrivals had reached about 550,000 tonnes by mid-January, albeit cautioning that the crop was heavily front-loaded and arrivals could well decline going forward. Instructively this already exceeds the informal forecasts of International Cocoa Organization officials who, at the start of the season said they see total production for the season from Ghana at around 500,000 tons.
G&S is cocoa that has been quality checked and sealed in bags by regulator Cocobod and is ready to be shipped.
Although the cocoa crop development phase in Ghana – as well as Cote d’Ivoire, has been helped by benign weather this season, recent Harmattan winds have been extremely harsh, two of the traders said.
However, cocoa industry analysts in Ghana assert that the major cause of last year’s production slump was inappropriate pricing. Ghana has customarily pre-sold its crop on forward markets in order to give a syndication of international banks comfort that allows them to lend the country up to US$2 billion a year, with which to purchase the crop for local farmers. Over the past two decades this arrangement had become a pivotal source of bulk forex inflows. However, in 2024, Ghana negotiated its forward sales at below US$3,000 per ton just before the price more than tripled on the spot and futures markets. Consequently, many farmers opted to sell their crops through unofficial channels rather than accept about 70% of Cocobod’s price which was barely a third of those spot market prices.
Late last year, in the run up to the December general elections, government increased the producer price for farmers but this has proved too little too late. The newly installed President John Dramani Mahama administration has promised further price increases for farmers.
In the meantime though Ghanaian cocoa farmers and industry officials expect a boost in the 2024/2025 season due to improved weather conditions and some rehabilitation efforts.
This would be a relief. Ghana saw its 2024 export earnings plummet to US$1.7 billion—the lowest in 15 years. This drop is largely attributed to dwindling production to a long term low. The decline in forex inflows from cocoa is exacerbated by illegal mining activities (galamsey), smuggling, and crop diseases, all of which have significantly impacted yields. In just three years, Ghana’s cocoa output fell from over one million metric tonnes in 2021 to slightly above 500,000 tonnes in 2024. This dramatic reduction has also weakened the country’s ability to secure favorable terms in the syndicated loan market.
Despite Ghana and its western neighbor, Côte d’Ivoire, jointly accounting for over 60% of global cocoa production, both nations have struggled to benefit from the recent surge in global cocoa prices due to forward sales agreements. In 2024, global cocoa prices soared by a record 157%, yet Ghana recorded its lowest export revenue since 2010.
