Ghana’s Cocoa; The Plot Enterprise Ghana Limited, a cocoa processing company, at Eshiem in the Sekondi-Takoradi Metropolis of the Western Region, says inadequate cocoa beans on the market is having a major toll on their production.
It said currently, the demand for cocoa beans for processing into finished and semi-finished products was exceeding supply, hence, hampering production.
Mr Alfred Ampah, Plant Manager of Plot Enterprise Ghana Limited, who made this known during the Regional Minister’s visit to company, said: “Ghana is the world’s second largest cocoa producer but is not able to handle the cocoa industry with adequate supply of cocoa beans to companies for improved production.”
He attributed the situation to several factors, including, diseases such as swollen shoot virus and black pod, which he added, had affected over 80,000 hectares of cocoa farms in the country, hence, reducing yields by up to 50 per cent in some areas.
Aside from that, he said deforestation and illegal mining activities had significantly contributed to the decline in cocoa production.
“Another factor is that the low prices being offered or set aside by the Ghana Cocoa Board (COCOBOD) often irritates farmers who would rather smuggle their cocoa beans into neighbouring French West African countries to sell and make enough profit, than sell in Ghana here,” he added.
Mr Ampah stated that the situation was further complicated by the fact that Ghana’s cocoa industry was heavily reliant on exports, with over 80 per cent of its cocoa beans being shipped abroad in their raw state.
According to him, part of the production lines of the company had been shut down, following the shortage of cocoa beans on the market.
He said: “This is an unfortunate situation so government must do something about the shortage of cocoa beans in the country so that we can stay in business.”
Responding to the issue, Mr Joseph Nelson, the Western Regional Minister, assured the company of his commitment to collaborating with stakeholders to find lasting solution to the problem.
He said: “With improved supply of cocoa beans, I believe the company can expand its operations and ultimately create more jobs for unemployed youth, particularly those in the Western Region.
Cocoa processing companies in Ghana have had their operations strained due to a decreased supply of Ghana’s cocoa beans resulting from recent low cocoa production and the increase in the price of the commodity on the international market.
The situation has forced many local cocoa processing firms to alter their way of doing business to minimise expenses as they contend with squeezed profit margins.
Citi Business News has gathered that there is a looming crisis in the cocoa processing industry and many of the local cocoa processing companies in the country have been hit by the low yields.
They are no longer getting the quantity of cocoa beans needed to meet their respective operational capacities. This limited availability of cocoa beans has forced a number of them to reduce production levels.
This has resulted in the underutilisation of machinery, leading to inefficiencies and higher per-unit costs.
Some of them have had their processing schedules disrupted as they struggle to maintain steady operations.
Citi Business News has learnt that confectionery items like chocolates, spreads, and pebbles produced by the Cocoa Processing Companies have experienced an all-time decline of 30 per cent due to their inability to raise revenue to increase the processing of cocoa beans.
In terms of production, processed cocoa beans fell by 50 percent, with the production of cocoa liquor, butter, and powder dropping from 3,000 to 1,400 metric tonnes.
This is happening at a time when the company has already recorded a US$ 6 million loss in the first quarter of 2024.
The decline in cocoa production in the country has largely been blamed on the devastating effects of illegal mining, poor weather conditions, and the swollen shoot disease.
Some farmers are exchanging large acres of cocoa farms for as low as GHS 50,000. Additionally, the smuggling of cocoa to neighbouring countries is another major challenge.
Ghana’s cocoa output for the 2023/24 season is expected to be almost 40% below a target of 820,000 metric tonnes when global cocoa prices hit US$ 10,000 per tonne this year.
In the first four months of 2024, Ghana’s trade balance narrowed after cocoa exports dropped. On a year-on-year comparison, cocoa output fell by about 50%.
Chocolate lovers in Ghana, for example, are now feeling the crunch as prices skyrocket. They are now paying more than GHS20 for a 100g bar of Kingsbite chocolate, up from the GHS 14 it was selling for a few months ago.
Source: Access Agric
