Weak global cocoa prices have caused much grief to African producers. Global cocoa futures were down 40% in late April from August 2016, when the decline started.
Côte d’Ivoire, the world’s largest producer of the commodity, has cut its 2017 budget by 10% consequently. Neighbouring Ghana, and second largest cocoa producer, also missed out on about $1 billion in cocoa export earnings due to the bearish market, according to Joseph Boahen Aidoo, Chief Executive of the Ghana Cocoa Board (Cocobod), on the sidelines of the emergency International Cocoa Organization (ICCO) meeting held in Abidjan in late April.
The $1.8-billion loan the Cocobod took for the 2016-17 season was spent carelessly or misappropriated to road contracts by Ghana’s erstwhile John Dramani Mahama administration ahead of elections in December 2016, causing it to run out in March. The Cocobod had to seek $400 million in bridge financing via cocoa bills from the Bank of Ghana, the country’s central bank.
In light of the debilitating effects their cocoa troubles are having on their finances, Côte d’Ivoire and Ghana have been forced to collaborate more. Unfortunately, the countries, which together account for about 60% of global cocoa supply, have different pricing systems.
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