On Monday, Ghana’s cocoa regulator, Cocobod, signed a $1.13 billion loan with international banks to finance needs for the 2022/23 season.
The world’s second largest-largest cocoa producer behind Ivory Coast uses loans from overseas financial institutions every year to finance bean purchases and other related operations. Based on statistics, the two West African nations account for roughly 60.00% of the global cocoa supply.
The loan made by Ghana Cocoa Board (Cocobod) was less than $1.50 billion secured last year and was oversubscribed by $130.00 million. The country’s parliament had approved a bigger $1.30 billion loan at the end of July.
Its lead arrangers include Cooperative Rabobank, DZ Bank, MUFG Bank, Natixis, Standard Chartered, the Industrial and Commercial Bank of China (ICBC), the Ghana International Bank, and the Arab Bank for Economic Development in Africa (BADEA).
This year, Ghana’s cocoa production plummeted to 689,000 tons on September 01, following the previous projection of 800,000. This latest data has prompted the International Cocoa Organization (ICCO) to upwardly revise its forecast for a worldwide cocoa deficit.
On Tuesday’s closing bell, the US cocoa futures rallied for two consecutive sessions this week and ended higher by 1.37% to $2,2369.00 per metric ton amid tight supply.
Illegal Mining could Ban Ghana’s Cocoa Abroad
Ghana’s Minister for Food and Agriculture, Dr. Owusu Afriyie Akoto, stated that the harmful chemicals used in illegal mining pose a massive threat to the nation’s cocoa production.
Akoto fears that the hazardous chemicals, such as cyanide, used in water bodies near cocoa farming areas endanger the country’s chocolate bean-producing sector.
He added that this illegal practice could lead to a ban of Ghana’s cocoa crops in the international market alongside an adverse effect on the local economy.
In Europe, new legislation could make the West African nation’s leading crops, cocoa and coffee, unexportable to many foreign countries.
