Ghana imposes limitations on cocoa purchases amid persisting shortages

Ghana, the world’s second-largest cocoa producer, is imposing restrictions on the purchase of specialty cocoa for the next growing season due to ongoing shortages that have dramatically affected the market. This decision comes after cocoa futures in New York soared to record highs earlier this year, though they have since declined by over 30%.

In a recent communication to buyers, Emmanuel A. Opoku, Deputy Chief Executive of Operations at the Ghana Cocoa Board, outlined that the allocations of specialty cocoa, which includes certified Fairtrade, UTZ, and Rainforest Alliance beans, as well as traceable beans, will be based on the total production for the season. This measure aims to distribute the available beans equitably among registered buyers.

The move reflects concerns that the upcoming crop may not meet expectations, despite favorable weather conditions and the availability of pesticides and fertilizers. Ghana has already postponed deliveries of at least 250,000 metric tons of cocoa to the 2024-25 season, which begins in October, following a significant drop in production. This decline has been compounded by the spread of swollen shoot disease, which has also impacted cocoa crops in neighboring Ivory Coast, the world’s top producer.

While the Ivory Coast anticipates a recovery in its cocoa harvest for the 2024-25 season, estimating a production of 2 million tons, up from 1.8 million tons, Ghana’s forecast is more modest. The country expects to increase its production to 700,000 tons from the current season’s 425,000 tons.

The Ghana Cocoa Board is now requiring buyers interested in specialty cocoa to submit detailed proposals, including off-take agreements and shipment plans. These submissions will help the regulator determine the approved tonnage for each buyer, ensuring a controlled and fair distribution of this valuable commodity.