According to sources familiar with the situation, Ghana, the country ranked second in cocoa production globally, is now experiencing a number of problems in its cocoa sector. As a result, there are plans to postpone the delivery of as much as 350,000 tons of beans until the following season. Compared to the original projection of 250,000 tons, this decision represents an increase.
Due to a string of bad harvests in Ghana and the neighboring Ivory Coast, two countries that produce 60% of the world’s cocoa, prices have soared this year, more than tripling in value. As a result, chocolate manufacturers around the world have had to increase costs for consumers due to a shortage of beans.
Bad weather, illnesses that damage cocoa beans, and illicit gold mining that displaces cocoa farmers are some of the factors that have wreaked havoc on Ghana’s cocoa harvest. Since the state offers lower pricing for its beans compared to other countries, Ghanaian farmers are smuggling more beans to neighboring countries, thus reducing the harvest available for local delivery.
Ghana reportedly had 785,000 metric tons of beans pre-sold for the 2023–24 season, but is currently projected to only deliver 435,000 metric tons. Typically, Ghana sells 750,000 to 850,000 tons, or around 80% of its output, a full year in advance. Recent crop yields, however, have declined to about 670,000 metric tons and are expected to fall even lower to less than 500,000 metric tons this season. Even next season, production might not bounce back much, according to industry analysts.
Chocolate companies and cocoa processors may have to dip into their reserves to satisfy demand, as the International Cocoa Organization has predicted a worldwide decrease in cocoa production of 10.9% to 4.45 million tons this season.
There has been a disruption to the traditional cocoa trading procedures due to the spike in cocoa prices. Historically, Ghana has set a minimum price for cocoa that traders can buy from farmers for the next season based on the average of advance sales. Ghana will have a tough time with next season’s forward sales because their crop this year was missing about 350,000 tons of beans that were meant to be sold. According to sources, Cocobod, Ghana’s cocoa regulator, is facing challenges in raising farmer prices due to the low number of forward sales—just 100,000 tons—at prices below 50% of current market rates.
Though Cocobod has been tight-lipped about the exact amounts and pricing of their forward sales, they have stated that business as normal. Professionals in the field are concerned that if prices don’t go up, more farmers would start smuggling cocoa beans, grow different crops, or sell their land to gold miners.
Ultimately, the cocoa sector in Ghana is facing a number of obstacles, including decreased yields, increasing worldwide prices, and difficulties with forward sales procedures. In one of the world’s most important cocoa-producing regions, the consequences affect more than just the economy; they also affect people’s ability to make a living and the way farmers do their jobs. Stakeholders will keep a careful eye on developments to determine the future stability of the global chocolate supply chain as the scenario progresses.
