COCOBOD to secure loans of up to $1.5 billion for cocoa purchases for 2024/25 period
According to two sources familiar with the arrangement at COCOBOD, Ghana’s cocoa regulator is set to borrow up to $1.5 billion by September to finance cocoa purchases for the 2024/25 season and compensate for the current low output.
Traditionally, Ghana secures an annual syndicated loan at the beginning of the season in September to finance bean purchases from farmers. However, delays occurred this year due to lower-than-expected cocoa output.
As a result of the production shortfall, COCOBOD withdrew $600 million from an initial $800 million loan and cancelled the remainder, as it could not guarantee the full loan amount.
One COCOBOD source mentioned that a request for proposals sent to banks indicates the intention to borrow up to $1.5 billion next season, with banks collaborating with COCOBOD to determine the optimal amount. Another source expressed confidence that the syndication would proceed.
At least one international bank has visited Ghana to assess cocoa farms before making a decision on the offer, with another scheduled to visit next month.
Production is anticipated to rebound to 810,000 metric tons next season, as per the sources, who preferred not to be named due to media restrictions.
COCOBOD did not provide a comment in response to requests. Ghana’s cocoa production has been hampered by adverse weather, diseases, and smuggling, with the 2023/24 season projected to be almost 40% below target.
The sector regulator reported losing about 150,000 tons of cocoa beans to smuggling and illegal gold mining in the 2022/23 season, with expectations of greater losses this season due to higher cocoa prices globally.
The Swollen Shoot virus has devastated around 590,000 hectares of farmland between 2018 and 2024, according to COCOBOD.
Despite challenges, one source expressed confidence that Ghana would meet next season’s target of 810,000 tons, anticipating improved weather conditions and increased output from rehabilitated cocoa farms.
Ghana’s cocoa export revenue declined by nearly 50% year-on-year in the first four months of the year, according to central bank data released this week.
Source- citinewsroom.com
