Ghana’s cocoa regulator Cocobod has extended its main crop buying period indefi-nitely to ensure the supply of premium beans for export as it races to fill sales contracts amid a failing harvest, government sources said on Tuesday.
The sources, who asked not to be named, said that cocoa purchases had slightly topped 600,000 tonnes by the end of May, adding that Cocobod had slashed its 2014/15 output target to 750,000 tonnes due to poor weather and disease outbreaks.
Cocobod forecast production of around 1 million tonnes at the start of the season, but later revised that figure to 850,000 tonnes.
This compares with the International Cocoa Organisation’s (ICCO) estimate of 696,000 tonnes, down from the previously estimated 810,000 tonnes, and down from 896,917 tonnes in 2013/14.
The 33-week October-to-May main crop in the world’s number 2 cocoa producer should have ended last week.
“We’re currently receiving about 20,000 tonnes of premium beans every week from the farms and we needed to continue in order not to break the stock inflows and shipments,” one of the sources, who confirmed the extension, told Reuters.
Ghana runs a two-cycle cocoa season consisting of the main crop, which produces premium beans destined for export mainly to Europe. A smaller July-to-September light crop, which averages around 75,000 tonnes of beans, is sold at a discount, generally to local grinders.
The drop in output this season has supported prices as chocolate makers were concerned they could be short of beans. European traders worry Ghana might be unable to supply around 150,000 to 200,000 tonnes of cocoa which it has sold and may seek to roll those contracts forward to the next season.
The sources said that the extension of the main crop would also prevent bean smuggling to neighbouring Ivory Coast, the world’s top grower.
Cocobod usually allows three weeks between the two seasons to allow buyers to mobilise logistics for the next round of purchases. But some fear beans currently stocked on plantations could leak over the border if a break were accorded.
Up to 100,000 tonnes of Ghanaian cocoa beans were believed to have been trafficked into Ivory Coast last season amid a drop in the value of Ghana’s cedi currency, according to industry sources.
In response, Cocobod set a farmer price at the start of the season in October, which was significantly above the price offered in Ivory Coast.
However, the cedi has since fallen to record lows, so at 5,520 cedis ($1,347) per tonne for Ghanaian compared with the price in the Ivory Coast of 850 CFA francs ($1.44) per kg, the buffer has been erased.
Ivorian farmers are now earning around seven per cent more for their beans than growers in Ghana.
The ICCO has forecast Ivory Coast will harvest 1.74 million tonnes in 2014/15, down from 1.75 million tonnes last year.