According to five sources who spoke to Reuters, Ghana, the world’s second-largest cocoa producer, is planning to postpone the delivery of up to 350,000 tons of cocoa beans to the next season due to poor crop yields. This development further compounds the challenges faced by the global chocolate industry, which has already been grappling with the doubling of cocoa prices this year following three consecutive years of subpar harvests in Ghana and Ivory Coast.
Ghana’s cocoa crop has been adversely affected by unfavorable weather conditions, bean disease, and illegal gold mining activities encroachment on cocoa farms. Furthermore, Ghanaian farmers are increasingly smuggling beans to neighboring countries to sell at higher prices than the state purchasing price, further reducing the already limited crop available for delivery within Ghana.
Sources revealed that Ghana pre-sold approximately 785,000 tons of beans for the current 2023/24 season but is likely to deliver only around 435,000 tons. The ongoing price rally is disrupting the established cocoa trade mechanism. Ghanaian authorities use the average of their forward sales to determine the minimum price at which traders can purchase cocoa from farmers in the following season. With 350,000 tons of forward-sold beans missing from this season’s crop, Ghana is facing difficulties with forward sales for the next season, with sources indicating that the country has only sold forward 100,000 tons so far. This situation may lead to an increase in bean smuggling, a shift to other crops, or the sale of more farmland to gold miners, further exacerbating the cocoa supply crisis in Ghana.