Local Cocoa Processors Cut Production

Local cocoa processors have been forced to slash output or import beans from neighbouring Cote d�Ivoire due to a crop failure that has strangled supplies to factories, company officials have said. Industry sources believe Ghana, the world�s number two producer of cocoa, is unlikely to meet a full season target of 750,000 tonnes, a figure revised downward from an initial projection of one million tonnes. �There�s not enough cocoa, so the factories lack beans to grind,� said an official with Swiss food processor Barry Callebaut. The company operates a 67,000-tonne capacity processing facility in Ghana, but he said it had to resort to sourcing up to 20,000 tonnes of cocoa from Cote d�Ivoire to run the factory. �It�s not abnormal. Sometimes we send cocoa (from Cote d�Ivoire) to Ghana for the factory, but not this kind of volume,� he said. Exporters in San Pedro, Cote d�Ivoire�s main cocoa exporting port, said they had been approached by Ghana-based grinders seeking to purchase a total of around 50,000 tonnes of beans. Other grinders have been forced to reduce output. �We don�t have enough beans to run at full capacity, so we�ve reduced our output by 60 per cent,� said an official with Cargill, which operates Ghana�s second largest grinding facility, a 65,000-tonne capacity factory. Ghana, Africa�s second largest cocoa processing hub after world leader Cote d�Ivoire, has total installed capacity of 430,000 tonnes, but has habitually operated well below that level. Its grinders depend on a 20 per cent discount for smaller beans produced mainly during the June-to-September light crop. These beans are typically blended with main-crop cocoa, which is too expensive to use on its own for processing. However amid this season�s crop failure, Ghana�s cocoa regulator Cocobod extended its main crop buying period to ensure the supply of premium beans for export as it struggled to fill contracts. Ghana�s grinding sector also faces regular, prolonged power outages that disrupt factory operations and force companies to run costly diesel generators. �The erratic supply of light crop beans in Ghana could spell the demise of the local grinding sector as they depend on a steady flow of discounted beans to offset production costs,� said Victoria Crandall, a soft-commodities analyst with Ecobank.