Ghana farmers hoard cocoa beans as they eye higher prices

Accra — Some cocoa farmers and buyers in number two producer Ghana have begun hoarding beans in anticipation of higher prices, industry sources say, potentially further constraining this season’s already heavily curtailed output.

While no data was available to indicate the scale of upcountry bean stocking, two licensed buyers and two farmers, who told Reuters they were involved in the activity, said they had only just begun to hold back cocoa.

“Who doesn’t want higher prices?” said one farmer, who had started holding onto beans and asked not to be named. “The price has been too low. Others smuggle but I can’t.”

Marketing board Cocobod acknowledged hoarding was happening but said it was not a factor in Ghana’s current low production levels. “There’s every commitment and effort to get the cocoa to the ports to sell,” Fiifi Boafo, Cocobod's head of public affairs, said.

Poor cocoa crops this season in Ghana and neighbouring Ivory Coast — the world’s top grower — are contributing to an expected global supply deficit of 374,000 tonnes. That has sent global cocoa prices climbing more than 50% to record highs in 2024.

In February, President Nana Akufo-Addo suggested Ghana’s government-fixed farmgate price, which will be set ahead of the start of next season in October, would be increased to reflect that surge.

“I have a few bags already,” said an executive at a licensed buying company, who asked not to be named as hoarding cocoa is not permitted. “There’s cocoa out there. If you have money, you can buy plenty between March and April.”

Ghana’s cocoa output for the 2023/24 season is expected to be almost 40% below a target of 820,000 tonnes, two Cocobod sources told Reuters in February.

Officials have blamed disease and plantation destruction by illegal miners for the shortfall and also worry about beans being smuggled out of the country where they can fetch higher prices.

It is not uncommon for farmers and buyers to stock beans to take advantage of an expected increase in Ghana’s farmgate price. But it usually only occurs towards the end of the season in September.

Some buyers as well as international exporters and traders said hoarding on a large scale at this point in the season was unlikely given the difficulties in preserving beans properly to avoid a degradation in quality.

“Smuggling is more likely as farmers may get a better price. Why hoard cocoa and wait until October?” one Europe-based trader said. 

Reuters