Sources from Ghana’s cocoa sector regulator, COCOBOD, indicate that the anticipated cocoa output for the 2023/24 season is likely to significantly miss expectations, with an estimated 40 percent shortfall from the target of 820,000 metric tons.
Contributing factors to this decline include adverse weather conditions, smuggling activities, illegal gold mining, and the prevalence of swollen shoot disease.
Expressing concerns over the production shortfall, the first source informed Reuters that strong seasonal winds and insufficient rainfall have worsened the situation, with the current output forecasted to be around 500,000 tons for the season.
Addressing the challenges, the source noted, ‘Unfortunately, the cause of the decline could not be remedied immediately through human intervention.’
In the preceding 2022/23 season, COCOBOD reported a loss of approximately 150,000 tons of cocoa attributed to smuggling and illegal gold mining, locally referred to as galamsey. Additionally, the regulator revealed earlier this month that the cocoa swollen shoot virus had ravaged around 500,000 hectares of cocoa farmlands.
Efforts to address these production challenges are underway, according to the first source, who cited ongoing farm rehabilitation projects, the commencement of the rainy season, and collaborative endeavors with security agencies to combat smuggling activities.
Despite the current challenges, the second source maintains optimism regarding Ghana’s potential for production recovery. However, COCOBOD did not provide comment on the matter.
The decrease in cocoa production from both Ghana and Cote d’Ivoire, alongside mounting deficits, has propelled global cocoa prices to unprecedented levels.
Traders are grappling with heightened demand and pricing volatility, with London cocoa futures surpassing the psychological threshold of £5,000 and New York cocoa breaching the $6,000 mark.
The surge in cocoa prices is starting to impact retail markets, with chocolate manufacturers like Hershey anticipating a slowdown in consumer demand due to rising costs.
Samuel Adimado, president of Ghana’s cocoa buyers group, described the current production forecast as ‘devastating,’ noting that member firms are adjusting their operations to remain viable amid these challenges.
Highlighting the alarming trend, the first source emphasized that escalating global cocoa prices have incentivized smuggling activities, potentially leading to even greater losses in the current season.