COCOBOD considering premium cocoa discount to local grinders
Cocobod is considering proposals to discount its premium main crop beans to local grinders as part of the new government's plans to increase local processing to 50 percent of annual output, the regulator's board chairman said on Wednesday.
Locally processed beans in the world's second largest cocoa producer have dropped to below 30 percent in the last two years from around 38 percent previously due to lack of cheaper beans, Hackman Owusu-Agyemang told reporters after a tour of the plants.
Ghana's yearly cocoa output average 800,000 tonnes in the last five years, harvested from a two-cycle season comprising the premium October-June main crop which is exported and a July-September minor crop, discounted at 20 percent to local processing firms.
Owusu-Agyemang said while installed capacity for local processing plants had increased to more than 300,000 tonnes, the light crop harvest had become inadequate to feed them, forcing some of companies to import from neighbouring Ivory Coast.
Apart from multinational firms such as Cargill and Barry Callebaut which sometimes bought premium beans to complement light crop supplies from Cocobod, many of the plants are operating at just around half of their throughput.
"The request that has been made of us is to see our way clear to give them a little discount of the main crop and we said we'd take a look at it," he said, adding that the proposals from the grinders included up to 5 percent discount.
"We cannot say no to their request," he said, adding that the government would consider it within the context of the overall cocoa trade and its commitments to modernise the sector to create jobs and enhance farmers' welfare.
The government of Nana Akufo-Addo, inaugurated in January, said it would introduce hand pollination of cocoa seedlings and irrigation of farms as part of plans to boost production to 1 million tonnes by 2020.
Owusu-Agyemang said although world cocoa prices continued to fall, resulting in losses of around $1 billion over the past year, the government would not reduce the price at which it buys the beans from farmers.
Ghana is on track to exceed its revised 800,000-tonne target for cocoa this season due to good rains this year, the chief executive of regulator Cocobod said.