Ghana Cocoa Authority to Secure $1.5 Billion Loan for Cocoa Bean Purchases in 2024-2025 – Medafrica Times

Ghana’s cocoa regulator, COCOBOD, plans to secure loans worth up to $1.5 billion by September to finance cocoa purchases for the 2024/25 season and compensate for low production levels in the current season. The move comes as Ghana, the world’s second-largest cocoa producer after Ivory Coast, typically receives an annual syndicated loan to finance the purchase of beans from farmers at the start of each season in September.

However, this year’s initial $800 million loan has been delayed due to lower-than-expected cocoa production. COCOBOD has already withdrawn $600 million and canceled the remainder as production for the season is forecast to be almost 40% below forecast, making the full loan amount unguaranteed.

Sources familiar with the deal indicate that COCOBOD has sent requests for proposals to banks, seeking to borrow up to $1.5 billion for next season. Banks will determine the optimal loan amount. At least one international bank visited Ghana to inspect cocoa plantations before deciding on the offer, while another bank is scheduled to visit next month.

The sources, who asked not to be named due to media restrictions, expect production to increase to 810,000 tonnes in 2024/25. Ghana’s cocoa production is impacted by unfavorable weather conditions, disease outbreaks such as swollen shoot virus, which destroyed approximately 590,000 hectares of agricultural land between 2018 and 2024, and cocoa smuggling exacerbated by rising global prices.

Despite the challenges, one source expressed confidence in achieving the target of 810,000 tonnes next season, citing expected improved weather and increased production from revitalized cocoa farms. However, Ghana’s cocoa export revenues fell by almost 50% year-on-year in the first four months of the year, according to central bank data released this week.