Ghana’s cocoa purchases collapsed in December due to election-related payment delays from the national marketing board and reduced financing for exporters, farmers and buyers told Reuters, fearing that these delays fuel smuggling.
Cocoa prices have reached record highs over the past year due to poor harvests in the world’s two largest producers, Ivory Coast and Ghana. Although West Africa has seen some rebound in the 2024/25 campaign, markets are still expecting potential supply disruptions.
Ghana’s Cocobod marketing board has moved from a three-decade-old marketing model to a new system this season, in which global traders and buyers are largely responsible for financing and providing much part of the cocoa harvest. They are then reimbursed when Cocobod pays for the beans.
However, sources at the Licensed Cocoa Buyers (LBC) said the December 7 elections, won by opposition candidate and former president John Dramani Mahama, had disrupted the new system due to uncertainty surrounding the results and the risk of election-related unrest.
Mr Mahama is committed to reforming the country’s cocoa sector.
An LBC executive told Reuters his company had cut funding for purchases and Cocobod’s payments had been delayed during the election period and that banks had also been reluctant to release funds.
Sources interviewed for this article asked not to be named because they were not authorized to speak publicly on the matter.
Cocobod denied that the elections or the transition period had any impact on its payments.
“We agree that in some cases there are operational challenges, and sometimes buyers pay farmers up to a week late. But there is no general problem of non- payment or late payment,” said Fiifi Boafo, Cocobod public affairs manager.
BEANS ACCUMULATE IN SOME PLANTATIONS
Ghana does not publish data on cocoa purchases. However, another source at a major buyer said his company’s purchases were down about 20% in December from the previous month, adding that the election was a factor, but the company also sold out the financing she had raised.
Delayed payments and funding shortages are felt most acutely in remote rural areas, said a district manager of a major cocoa marketing company, who said it sources its cocoa from farmers by promising them future payment.
“It’s been two weeks since my buyers credited me with around 2,000 bags of cocoa beans, but I still don’t have the money to pay,” he said, explaining that he was waiting for a funding from its headquarters.
Ghana’s cocoa production has rebounded from last season’s disastrous harvest, but some farmers are now struggling to sell their produce.
One farmer, who asked not to be named for fear of potential reprisals from buyers and Cocobod, said he had not found a buyer for his 12 bags of beans, adding: “This has made Christmas bitter”: “It made Christmas bitter”.
Faced with a backlog of beans on plantations and a growing gap between Ghana’s official producer price and much higher global spot prices, buyers told Reuters that a rise in illegal smuggling of beans beans from Ghana was probably inevitable.
The country lost more than a third of last season’s production to smuggling, mostly through neighboring Togo, where sales are unregulated.
