Ghana to Tap Stabilization Fund for Cocoa Pay Next Season
Ghana will probably start drawing from its stabilization fund to cover cocoa farmers’ pay during the season that starts in October as the second-biggest grower props up local prices in the face of a global slump. While Ivory Coast, the largest producer, has already slashed the price it pays farmers for the smaller of two annual crops by 36 percent, Ghana’s Cocoa Board so far kept it unchanged and is ruling out any cuts for the upcoming main crop, despite its own mounting debt. The country is hoping that demand in Asia and the Middle East will increase to boost international prices, Deputy Chief Executive Officer Yaw Adu-Ampomah said in an interview.
Cocoa futures in New York have declined about 33 percent in the past year as analysts predict a large global surplus for the season ending in September.
“Right now the stabilization fund is being looked at in case it falls further,” Adu-Ampomah said. The government contributes to the fund during boom years and the money is available to support farmers when needed, he said, while declining to comment on the fund’s current balance.
Read: Ivory Coast, Ghana seek joint cocoa strategy to counter slump
Ivory Coast and Ghana are both expecting bumper harvests this season, and average cocoa prices aren’t seen rising more than about 10 percent over the next 12 months, according to the median of 18 analyst estimates compiled by Bloomberg.
Ghana may not pay bonuses to farmers this season because of lower prices, CEO Joseph Boahen Aidoo told reporters last week.
“Considering the current level of prices, we believe we are paying $400 more per ton to our farmers,” he said.