(Bloomberg) -- Ghana will delay the start of the new cocoa season as it waits for the proceeds of a $1.3 billion syndicated loan to pay farmers, according to the head of the industry regulator.
Purchases for the bigger of the two annual harvests will only commence in the middle of October, Ghana Cocoa Board Chief Executive Officer Joseph Boahen Aidoo said in an interview by phone on Friday. The regulator's producer price review committee, which sets the minimum pay for growers, will be meeting next week, Aidoo said.
“We are waiting for the first tranche of the $1.3 billion syndicated loan to hit cocoa board's accounts before we open the season,” said Aidoo.
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Ghana is unlikely to lower farmer prices even after a request from Ivory Coast, the biggest cocoa grower, to narrow a gap in producer payments, Aidoo said. Ghana has paid farmers the equivalent of $1,725 a metric ton since October, while Ivory Coast reduced the minimum price for producers to the equivalent of $1,226 per ton in April.
The two West African nations, which account for more than 60 percent of global cocoa production, are facing a slump in prices of almost a third in the past year. While Ivory Coast adjusted farmer payments in line with lower prices, Ghana chose to absorb the volatility by keeping payments unchanged, raising the risk of cocoa smuggling from its neighbor.
“Price reduction is impossible,” Aidoo said. The cocoa board “is a shield that protects the farmers from shocks.”
Ivory Coast is due to announce a new producer price on Oct. 1, Lambert Kouassi Konan, chairman of the country's cocoa regulator known as Le Conseil du Cafe-Cacao, told reporters in the commercial capital, Abidjan, on Friday. The country produced a record crop of 2.015 million tons of cocoa for the season through Sept. 24 and exported 1.926 million tons over the same period, Konan said.
--With assistance from Olivier Monnier and Baudelaire Mieu
To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net.
To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Karl Maier
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