Only 20% of cocoa processed locally; Still short of gov’ts 50% target

Ghana still exports about 80 per cent of its raw cocoa beans despite calls for value addition in order for the country to earn more revenue from the commodity.

The Managing Director (MD) of the Cocoa Marketing Company (CMC), Mr Joe Forson, at a recent conference in Accra said about 20 per cent of the total cocoa output for the 2017/2018 cocoa season was processed domestically.

This means that about 190,000 metric tonnes out of the over 900,000 metric tonnes of cocoa that was produced in the 2017/2018 crop season was distributed to the seven major local processing companies in the country.

This figure still falls short of the government’s target of processing about 50 per cent of the country’s total cocoa output.

The government announced an ambitious plan to increase cocoa production to one million metric tonnes as it improves the local processing of the beans to 50 per cent.

Currently, there are about seven major cocoa processing firms in the country, with an estimated processing capacity of about 500,000 mt, which puts them in a position to meet the government’s 50 per cent processing target.

However, just about 200,000 mt of their capacity is currently being utilised which represents 40 per cent.

Of total annual production, about 20 per cent, comprising mainly the light crop beans, are discounted to the processors while the main crop is exported.

Given that the main crop beans sells at a premium on the international market, processors of the crop have long called on the government to discount the price for them to be able to buy for the factories.

Limiting factors

In an interview with the GRAPHIC BUSINESS, the Senior Public Relations Manager of the Ghana Cocoa Board, Mr Noel Amenyah, said in order for the local processing companies to fully explore their full potential, they must have the ability to buy the beans , have adequate power available , and the skills to enable the plants to achieve their maximum capacity.

He stated that those were some of the factors that were limiting the processing factories to operate at full capacity.

“Even though the installed capacity is here, we are unable to fully utilise it,” he indicated.

Additional investments

He said COCOBOD was attracting more investments in the area of cocoa processing in order to process more of the cocoa beans locally.

He added that the government was also in discussion with the Chinese government to establish a 40,000 capacity processing plant in the Western Region.

He stated that some individual companies were also setting up factories which were at different stages of completion.

“When all these are completed, they will also take part of the cocoa beans for processing which will inch us closer to achieving the 50 per cent target,” he noted.

“Our objective is to process more here as government has directed. It will not come overnight but there is an effort to push the local grinding capacity,” he added.

Discount

The Board Chairman of the Ghana Cocoa Board, Mr Hackman Owusu Agyemang, during a working visit to some of the local processing companies in May, last year, said the government was considering a five per cent discount of the main crop as a motivation to increase local processing.

Mr Amenyah disclosed that it was a request that the processing companies made.

“They wanted a discount on the main crop beans but some thinking must go into this. We are doing a cost benefit analysis to see what this discount will translate into,” he explained.

He explained that the discussion on the discount had, however, been put on hold considering the fact that cocoa prices had been dropping on the international market.

“The prices have been dropping for some time now so this is not even the time to be thinking about discounts,” he said.