COCOBOD has launched a $1.5 billion finance facility to boost the country’s cocoa sector.
The move is expected to enhance the country’s cocoa industry by making viable cocoa beans available to farmers. The banks involved in the syndication are currently in talks with COCOBOD before the signing the agreement next month.
COCOBOD and a consortium of 36 banks with Standard Bank, as one of the joint mandated lead arrangers for the transaction signed with Credit Agricole, International Commercial Bank of China, Ghana International Bank.
Ghana, Ivory Coast and other major world cocoa producers have seen output decline so far this season after a record output a year ago leading the international cocoa organisation predicting a 71,000 ton global deficit.
Last year, COCOBOD clinched a record syndicated loan deal of $2 billion with about 20 banks, who were mostly from Europe.
According to Dr Kwabena Duffuor, Minister of Finance & Economic Planning, a significant portion of the loan will go into the expansion of the sector.
Government has a monopoly over the export of cocoa beans. But domestic purchasing of beans is carried out by licensed buying companies (LBCs) who pay a fixed price to cocoa farmers, before selling to COCOBOD, who then pays them commission and transport costs on top of the producer price.
COCOBOD provides seed funding to the LBCs for purchases at the beginning of the cocoa season based on a combination of the LBCs’ market share in the previous season and the set price.
There is usually a lag between official purchases and warehouse stocks.
The highest cocoa production figure in Ghana of 740.458 tonnes was recorded in the 2005/2006 crop season, but the highest export figure was registered in the 2006/2007 season where production stood at 614.528.