World’s number two cocoa producer, Ghana, is presently going through a poor harvest season, which has led to increase in the price e of the commodity on global markets.
The West African country which is also struggling to fulfil sales contracts has been struck by an unexpected fall in production, which farmers blame on a lack of pesticides and bad weather, could leave the world’s leading chocolate makers short of beans and deal a fresh blow to the West African country’s precarious finances.
Senior government sources now estimate Ghana’s 2014/15 crop will not exceed 700,000 tonnes, far below industry regulator Cocobod’s initial forecast of more than one million tonnes.
“There has been a crop failure and the latest indication is that our best (output) is around 690,000-700,000 tonnes,” a government source told Reuters.
Ghana had a crop of about 900,000 tonnes in 2013/14.
“This year every farmer is crying,” said Johnson Mensah, who serves as chief farmer for Western Region South, which has 174,000 cocoa farmers. “We haven’t experienced a season like it in a long time.”
European traders said the shortfall means Ghana might be unable to supply around 150,000 to 200,000 tonnes of cocoa which it has sold and may seek to roll those contracts forward to next season.
Global cocoa prices have already begun to climb, with a smaller crop in Ghana likely to lead to a significant global deficit in the 2014/15 season. ICE London futures have risen about 5 percent in the last two weeks.
A shortage of supply from Ghana could create serious problems for international traders and premium chocolate makers such as Lindt, whose recipes rely heavily on the world’s top producer of high quality cocoa beans.
The drop in production has already begun to cause hardship for growers, many of whom live in villages with little access to electricity, running water, schools and medical care.