Ghana asks cocoa traders for bridging loan to cover main 2024 harvest

According to inside sources, Bloomberg and local media report that the country is facing delays in concluding an annual syndicated loan from its usual lenders and has gone to the traders to raise at least a third of the $1.5 billion it wants to borrow.

The funds will serve as a bridge as it continues discussions with banks before the season starts in October. Bloomberg said a spokesperson at Barry Callebaut declined to comment, and Olam did not respond to an emailed request for comment. Cocobod spokesman Fiifi Boafo also declined to comment.

Come September, the industry regulator of the world's second-largest cocoa producer secures an international syndicated loan to finance licensed buyers who purchase cocoa from smallholder farmers for export.

In 2023, Cocobod was also forced to borrow between $150 million and $200 million from cocoa traders to finance bean purchases since the 2023-24 season due to delays in securing a bank loan.

Ghana’s debt restructuring has also added to Cocobod’s problems. In November, it was forced to borrow $400 million from cocoa traders, followed by another $200 million in March after lenders declined to release the final tranche of the $800 million facility.

According to Bloomberg, banks withheld the money amid concern over the nation’s cocoa revenues due to a slump in output. This left the global market in short supply for the third straight year.

A combination of unfavorable weather, disease, and a lack of fertilizers curbed bean harvests in Ghana and neighbouring Cote d’Ivoire, sending futures prices earlier this year above $11,000 per ton for the first time.

In its July Market Report, the International Cocoa Organization (ICCO) said data reveal that arrivals of cocoa beans at ports in Cote d’Ivoire were down by 26.5% compared with the same period the previous season and reached 1.679 million tonnes by 11 August. In Ghana, at the time of writing, no current data on cocoa purchases were available - but reports suggest that a crop recovery is anticipated for the next season.