After the establishment of a floor price in favor of Ivorian and Ghanaian cocoa farmers at the end of the summer, bean sales got off to a slow start, but the sector is witnessing a gradual recovery in sales. In Ghana, the sector is encouraged by a $600 million loan from the AfDB and Credit Suisse.

Ghana, the world's second largest cocoa producer, says it has so far sold nearly 200,000 tonnes for the 2020-2021 campaign, at a price including the floor price recently decided by the country and its Ivorian neighbor, for the benefit of producers. .

The two countries had announced in July that all cocoa purchases for the 2020-2021 campaign should include a living income differential of $400 per ton, in order to combat widespread poverty among farmers.

To this major overhaul of world cocoa pricing, buyers initially reacted cautiously, with only a few deals concluded in the period immediately following the announcement.

The end of industrial reluctance
But “so far, everything is going according to plan,” said Joseph Boahen Aidoo, managing director of Cocobod (Ghana's cocoa price regulator), on the sidelines of an investment conference in Johannesburg: “The income differential is set to last. So unavoidable. Buyers, processors, and brands are listening.”

According to the head of Cocobod, the country plans to sell 650,000 tons of cocoa for the coming season.

On the Ivorian side, the agreement signed by the Singaporean Olam last October, for the purchase of 100,000 tonnes of Ivorian cocoa, confirms this acceptance of the new premium on the part of industry players who initially showed reluctant.

Prospects for growing and sustained production
Ghana on Tuesday signed a $600 million loan agreement with the African Development Bank (AfDB) and Credit Suisse aimed at boosting its cocoa sector. The loan will help Cocobod to supply short-term working capital, dedicated to local processing companies, in particular to enable them to pay for new warehouses in order to store the beans longer without deteriorating.

The loan will also fund a program to replace aging trees and destroy plantations infected with cocoa swollen shoot virus, a viral disease threatening Ghana's production.

“Over the next five or six years, AfDB assistance will help transform the Ghanaian cocoa sector, increasing production from around 900,000 tonnes to 1.5 million tonnes,” said Joseph Boahen. Aidoo, noting that production losses due to replanting and tree destruction programs should be compensated by an increase in productivity driven by plantation pollination initiatives.