Source: Reuters
Ghana has lost more than a third of its cocoa output for the 2023/24 season due to smuggling, according to a senior official from the Ghana Cocoa Board (Cocobod), Reuters reports.
Farmers facing delayed payments and lower local prices have increasingly turned to smuggling networks, which are becoming more sophisticated.
Cocoa production in both Ghana, the world’s second-largest producer, and Ivory Coast, the largest, has struggled this season, contributing to a four-year supply deficit that has driven global cocoa and chocolate prices higher. However, cocoa commands higher prices in neighbouring Ivory Coast and Togo, where the currency is more stable and the sector is less regulated.
By the end of June, Ghana had produced 429,323 metric tonnes of cocoa, which is less than 55% of the average for this point in previous seasons. The 2023/24 season is now on track to see the country’s biggest production decline in over 20 years.
Smuggling losses have more than tripled this season, with an estimated 160,000 tonnes of cocoa illegally moved across borders, according to Charles Amenyaglo, Cocobod’s director of special services, who oversees the board’s anti-smuggling task force. Despite this, the task force has intercepted around 250 tonnes, compared to just 17 tonnes last season.
“The data is alarming,” said Abubakar Omae, general secretary of Ghana’s cocoa and coffee farmers association.
Although over 10 individuals have been sentenced to prison terms ranging from three months to 10 years for smuggling, Amenyaglo said Ghana’s military will soon be deployed to strengthen efforts against traffickers.
Economic Challenges Fuel Smuggling
The rise of smuggling networks can be traced back to Ghana’s economic and currency crisis in 2022. Cocoa has been trafficked into Togo, Burkina Faso, and even as far as Mali. Amenyaglo revealed that smugglers have used creative methods to transport cocoa, including hiding it in tipper trucks covered with quarry chippings and disguising it in fuel tankers.
Cocobod’s financial struggles, exacerbated by issues with the syndicated loan it relies on to purchase cocoa beans, have delayed payments to farmers, making them more susceptible to selling their produce to traffickers offering higher prices.
“If we were liquid and actively on the field, smuggling could be curtailed,” said Samuel Adimado, president of Ghana’s cocoa buyers’ group.
In an attempt to address the crisis, Ghana opened the 2024/25 season earlier than usual, introduced a new funding model, and raised the farmgate price by 45%. Farmers are hopeful these measures will help, though there are concerns that a weakening currency could undermine the price hike.
“We’ve invested a lot to boost cocoa production in Ghana, not for it to benefit the sectors in Togo or Ivory Coast,” said Amenyaglo.
Source: www.reuters.com
