Ghana’s President John Mahama highlighted a $1.3 billion revenue gap facing Cocobod due to existing contracts amid economic challenges. Cocobod is managing considerable debt while production figures are showing improvements. Nonetheless, high cocoa prices are pressuring demand and affecting manufacturer costs, leading to consumer selectivity in purchases.
In a recent address, Ghana’s President John Mahama indicated that the country’s cocoa body, Cocobod, may incur approximately $1.3 billion in losses related to existing contracts amid ongoing economic challenges. The President emphasized the significant financial strain, attributing it partially to a cost-of-living crisis affecting the nation.
Cocobod is reportedly managing a debt of 32.5 billion cedis ($2.1 billion), and the nation faces an overall debt repayment total of $8.7 billion, which includes substantial amounts owed to various sectors, such as $4 billion to the electricity company. Mahama pointed out that during the 2023/2024 season, Cocobod failed to deliver 333,767 metric tons of cocoa, resulting in financial implications.
The President noted, “For every ton of cocoa delivered this year, in fulfillment of the rollover contract, Cocobod and Ghanaian farmers will lose $4,000 in revenue, and Cocobod will lose another $495 million by the time the board finishes supplying the remaining contracts”. He criticized Cocobod for not taking advantage of high cocoa prices, which recently have been significantly favorable on futures markets.
Despite these difficulties, the International Cocoa Organization (ICCO) has expressed optimism, forecasting a potential surplus of 142,000 tonnes in the cocoa market for the 2024/2025 season, a shift from expectations of continued supply pressure. The ICCO reported improved production figures, stating that Ghana’s cocoa stock reached 550,000 tonnes by the end of January 2025, surpassing estimates for the 2023/2024 season.
However, the organization also highlighted that the demand for cocoa, especially for premium chocolate products, has been hampered by high prices, leading major manufacturers to face operational cost challenges. There has been an observable trend of consumers becoming more selective with their purchases due to heightened household costs, exemplifying the impact of economic conditions on confectionery sales.
In summary, Ghana’s cocoa sector is grappling with significant financial challenges, including a projected revenue gap of $1.3 billion for Cocobod due to unmet supply contracts. While there are encouraging signs of potential production surpluses, the overall economic climate complicates the situation, with rising costs affecting both manufacturers and consumers. The outlook suggests a complex path ahead for Ghana’s cocoa industry as it navigates these multifaceted challenges.
Original Source: www.confectioneryproduction.com
