Cocoa shortage forces shutdown of cocoa processors in Ghana

2 February, 2024

Some cocoa processors in Ghana are said to have halted operations due to an acute shortage of cocoa beans, Cocoa Post has disclosed.

According to the report, a source close to the matter told the news online portal that some grinders in the country have not received cocoa beans allocations in months.

"The situation is terrible, no beans available," the source said, adding that "[I] haven't seen anything like this for very long."

The prevailing circumstance, they said, has compelled some grinders to temporarily shut down processing plants until a resumption of regular supply of cocoa beans.

Our independent checks revealed that despite the cocoa shortage, some processors in the Tema industrial Free Zones enclave were still operating with old stock as of Monday morning, January 22, 2024.

However, the source insisted it is only a matter of weeks or even days until their activities also ground to a halt.

"Barry Callebaut is working, and Olam will run out of beans by Monday next week," they said.

Another source, also pleading anonymity, claimed Olam's 45,000-ton capacity cocoa processing plant in Kumasi could shut down in the coming days or weeks if beans are not made available.

According to the person, the company's 32,000-ton warehouse is practically empty, but for rations of 100 or 200 metric tonnes of cocoa beans that are received occasionally.

Concerns are that the cocoa bean scarcity crisis could trigger personnel layoffs by some companies as a measure to forestall a total collapse.

Barry Callebaut, Cargill, Olam, Cocoa Touton, Niche Cocoa, WAMCO, CHOCOMAC, and Cocoa Processing Company are among Ghana's leading cocoa processors and are altogether estimated to grind about 40% of the country's annual average output of 800,000 metric tonnes.

Presently, Ghana is the world's second-largest producer of cocoa beans, a commodity that is the core ingredient in chocolate, a global snack.

However, the country has been experiencing a consistent reduction in annual crop output in the last couple of years, attributed to unfavourable weather, disease, and illegal gold mining, among others.

According to some cocoa purchasing entities upcountry, it has become increasingly difficult to get cocoa to buy, despite being in the main crop season.

Cocoa Post's sources within some licensed buying companies (LBCs), however, cited the more pressing challenge of not being paid by COCOBOD for cocoa already delivered.

This is despite the Board receiving the $800 million syndicated loan, thereby exacerbating the smuggling of cocoa outside the country.

One claimed some of the main crop produce had been lost to illegal cross-border trade, while the Ghana Cocoa Board struggled to raise its annual syndicated loan to buy the 2023/24 crop.

COCOBOD has officially forecast production of about 800,000 metric tonnes for the 2023/24 season, but industry watchers are forecasting a harvest of around 570,000 metric tonnes.

A production shortfall last year contributed to Ghana defaulting on supply contracts for up to 44,000 metric tonnes, the first time in the country's history.

Source: Cocoa Shortage Forces Shutdown of Ghana Cocoa Processors (thecocoapost.com)

Tags: Ghana Cocoa

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