COCOBOD operates on $2-billion budget deficit due to fall in cocoa price

The Ghana Cocoa Board (COCOBOD) is running on a $2-billion budget deficit, as the price of cocoa falls on the international market, its Chief Executive, Mr Joseph Boahen Aidoo, has said.

“Cocoa contributes significantly to the country’s economy, but we don’t consume much of it in Ghana; everything is consumed in Europe and they determine the price,” he told journalists on the sidelines of the National Chocolate Day celebrations yesterday.

National Chocolate Day

This year’s National Chocolate Day was on the theme: “Eat Ghana, Eat Chocolate”.

The day was instituted by the Ghana Tourism Authority (GTA), in collaboration with the Cocoa Processing Company, the COCOBOD and the Ghana Chefs Association, in February 2007 to create awareness of the need for Ghanaians to patronise cocoa products and help generate more revenue for national development.

Major highlights of this year’s event included a cooking competition, a quiz and an exhibition of cocoa products, including chocolates, alcoholic and non-alcoholic beverages, soap and pomades. 

The loss

Throwing more light on the cocoa price situation in the interview, Mr Aidoo said in 2016, one tonne of cocoa (about 16 bags) sold at $3,000 but lost value in 2017 to about $1,900.

He said today it was about $1,800 and might go further down.

“This means COCOBOD, which is managing the cocoa economy, cannot have enough money even to buy the cocoa beans because we pay GH¢7,600 per farmer for every one tonne, which is the equivalent of $1,808.

“Now the international market price is $1,800. For you to bring cocoa from the hinterland to the port costs about $500 to $600 in operational expenses. When this is added to the farmers’ cost of $1800, we are talking about $2,400. We are losing.

“Now COCOBOD is running at a budget deficit of $2 billion. We have to go and borrow to make up. We have written to the government to see if it can take it up because cocoa is a very important crop for the Ghanaian economy,” he said.

He attributed the price dip to increasing supply of cocoa on the world market from the two major producers — Ghana and Cote d’Ivoire — and other producers which, he said, was pulling down prices because of glut.

“Cote d’Ivoire is increasing production, Ghana is increasing it and all other cocoa producing countries are doing same. So we go and dump the cocoa on the international market and the prices continue to fall. We cannot reduce production because the productivity of the cocoa farmer is very low. Some farmers are producing about two or three bags when, elsewhere, farmers are producing 30 bags,” he said.

He, however, said while the country would not reduce its production, as it sought to encourage farmers to go beyond the two to three bags per acre, it was also interested in promoting the processing and consumption of cocoa locally.

Little processing

Although Ghana accounts for 20 per cent of the $9-billion global cocoa bean market, it is estimated that less than 30 per cent of its cocoa beans are locally processed.

This means that Ghana captures only five per cent of the US$28 billion global intermediate cocoa processing industry. 

Chocolate love

Speaking at the National Chocolate Day celebration, the Minister of Tourism, Arts and Culture, Mrs Catherine Afeku, said the celebration of the day, apart from celebrating love, was also to honour Ghanaian farmers, including Tetteh Quarshie, who toiled to put the country’s cocoa on the world map.

She said the sod had been cut for work to begin on the construction of the country’s cocoa museum to immortalise Tetteh Quarshie, as well as support the consumption of cocoa.

She rallied the public to become emissaries for cocoa consumption on Valentine’s Day and beyond, adding that as part of the event, bars of chocolate would be sent to the airport to give chocolate to airline passengers.

Chocolate imports

The Managing Director of the Cocoa Processing Company, Nana Agyenim Boateng, expressed worry over the importation of about $45 million worth of chocolate in December last year for hampers.

He said even if half of the amount had been used to purchase Ghana-made chocolate, it would have gone a long way towards transforming the economy.

He urged the public to patronise local chocolate to contribute to creating jobs and expanding the economy.