Ghana defied expectations and increased production for the cocoa year that ended on September 30. Despite smuggling and initially low deliveries, total cocoa production reached 703,000 tons, according to a report by the Ghana Broadcasting Company. This is the first time that Ghana has surpassed 700,000 tons.
The production represents a three percent increase over last years total of 680,000 tons. Increased producer prices and two bonus payment disbursed over the year certainly were other factors that contributed to the increase. The last payment, announced in late July, amounted to GH¢2.00 ($1.40) per bag of cocoa (62.5 kg).
I am doubtful that Ghana will achieve its goal of producing 1 million tons. The original deadline for reaching that milestone, 2009/10, has already been postponed by a year to 2010/11. It seems to me that the logistics of planting, spraying, harvesting, etc., necessary to generate an additional 300,000 tons are to large a challenge to meet in such a short time.
In the meantime, the new producer price, due to be announced this week, are sure to help determine how fast production will increase. The delay in announcing the price had led to uncertainty which encourages smuggling. Already, one report notes that smugglers near the Ivorian border are offering up to GH¢50 ($34.80) more than the old producer price of GH¢120/bag ($83.50). The current world market prices of $3,200/ton translates into a per bag price of GH¢287. The COCOBOD better increase the producer price sufficiently or smuggling will continue to plague Ghana.
- Côte d’Ivoire Production Reports for the Last Cocoa Year
- Ghana Cocoa Board Increases Producer Prices