Local cocoa processors cut production

•    Barry Callebaut, a cocoa processing company.

• Barry Callebaut, a cocoa processing company.

Local cocoa processors have been forced to slash output or import beans from neighbouring Cote d’Ivoire due to a crop failure that has strangled supplies to factories, company officials have said.

Industry sources believe Ghana, the world’s number two producer of cocoa, is unlikely to meet a full season target of 750,000 tonnes, a figure revised downward from an initial projection of one million tonnes.

“There’s not enough cocoa, so the factories lack beans to grind,” said an official with Swiss food processor Barry Callebaut.

The company operates a 67,000-tonne capacity processing facility in Ghana, but he said it had to resort to sourcing up to 20,000 tonnes of cocoa from Cote d’Ivoire to run the factory.

“It’s not abnormal. Sometimes we send cocoa (from Cote d’Ivoire) to Ghana for the factory, but not this kind of volume,” he said.

Exporters in San Pedro, Cote d’Ivoire’s main cocoa exporting port, said they had been approached by Ghana-based grinders seeking to purchase a total of around 50,000 tonnes of beans.

Other grinders have been forced to reduce output.

“We don’t have enough beans to run at full capacity, so we’ve reduced our output by 60 per cent,” said an official with Cargill, which operates Ghana’s second largest grinding facility, a 65,000-tonne capacity factory.

Ghana, Africa’s second largest cocoa processing hub after world leader Cote d’Ivoire, has total installed capacity of 430,000 tonnes, but has habitually operated well below that level.

Its grinders depend on a 20 per cent discount for smaller beans produced mainly during the June-to-September light crop. These beans are typically blended with main-crop cocoa, which is too expensive to use on its own for processing.

However amid this season’s crop failure, Ghana’s cocoa regulator Cocobod extended its main crop buying period to ensure the supply of premium beans for export as it struggled to fill contracts.

Ghana’s grinding sector also faces regular, prolonged power outages that disrupt factory operations and force companies to run costly diesel generators.

“The erratic supply of light crop beans in Ghana could spell the demise of the local grinding sector as they depend on a steady flow of discounted beans to offset production costs,” said Victoria Crandall, a soft-commodities analyst with Ecobank.

—Reuters

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