Battling Beans: Ghana’s Cocoa Industry Grapples with 150,000 Tonnes Smuggling Loss in 2023.
Ghana’s cocoa industry, a cornerstone of its economy, has encountered significant hurdles in recent years, as revealed by Joseph Boahen Baidoo, Chief Executive of the Ghana Cocoa Board (COCOBOD). Baidoo disclosed that Ghana lost a staggering 150,000 tonnes of cocoa beans last year due to rampant smuggling activities.
To combat this issue, COCOBOD has taken decisive action by establishing a task force comprising national security personnel tasked with conducting regular operations to apprehend perpetrators and recover the stolen product. However, such efforts have not been without consequence, with one operation in 2023 resulting in the tragic loss of two lives in an unnamed community in the Volta region.
Addressing the Public Accounts Committee (PAC) of Parliament in Accra, Baidoo underscored the critical role of price differentials in driving cocoa smuggling across borders. He emphasized that Ghana’s lower produce prices compared to neighboring Cote D’Ivoire served as a primary motivation for illicit activities. Baidoo outlined Ghana’s practice of forward sales of cocoa, which allows for the pre-sale of a significant portion (60 to 65%) of cocoa produce at reduced rates before harvest, contrasting with Cote D’Ivoire’s spot sales strategy that enables farmers to command higher prices.
In response to these challenges, Ghana has devised a new producer price structure set to be implemented in the upcoming crop season, aimed at ensuring fair compensation for cocoa farmers. However, the country’s cocoa production has also been hampered by the outbreak of El Nino disease and the scourge of illegal mining in cocoa-growing regions, exacerbating the situation.
Baidoo highlighted that Ghana’s struggles are not unique, citing Cote D’Ivoire’s loss of approximately 600,000 tons of cocoa to the same disease. COCOBOD has established initiatives to tackle illegal mining, including engaging farmers and stakeholders and undertaking tree rehabilitation projects since 2020.
Despite efforts to mitigate these challenges, cocoa output for the 2022/2023 harvest is forecasted to decline to 750,000 tonnes, with projections for the 2023/2024 season ranging between 650,000 and 700,000 tonnes due to the adverse effects of illicit activities. However, Baidoo expressed optimism that COCOBOD’s rehabilitation efforts and policy implementations will lead to a resurgence in cocoa production within the next four to five years.
Responding to inquiries regarding recent approvals for cocoa bean imports, Baidoo clarified that this policy has long existed to enable companies manufacturing cocoa products to access cocoa from diverse sources for blending, ensuring the quality and consistency of their products.
