Ghana, the world’s no. 2 cocoa grower, is headed for its biggest harvest in at least a decade after good weather and government interventions helped boost its output, according to two people familiar with the matter.
Favorable conditions, improved farmer prices and better farming practices, such as hand pollination and pruning, raised production to 965,493 tons by June 3, when the main-crop harvest ended, said the people who asked not to be named because the information isn’t public.
That’s already the highest in five years, before accounting for some main-crop deliveries still underway and a 12-week mid-crop season that ends in September. Earlier projections estimated that the smaller harvest would produce 50,000 tons of cocoa.
The Ghana Cocoa Board now expects the annual output to exceed the 1 million-mark for the first time since 2010-2011, the people said. A spokesman for the regulator did not immediately comment when reached by phone.
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Ghana and neighboring Ivory Coast, which produce almost 70% of the world’s cocoa, expanded output just as the pandemic locked down cities around the world, hurting demand. The two countries secured a pay raise for cocoa farmers by charging companies from Hershey Co. to Nestle SA a premium of $400 per ton from Oct. 1. But a drop in consumption has left growers unable to sell their crop.
Ghana’s government, which is the sole cocoa buyer in the country, was already struggling to pay for all the beans as early as January. It had projected a harvest of 850,000 tons for the 2020-2021 season that ends in September, after hitting a five-year low a year earlier.
The higher-than-expected output is seen widening a global surplus, with cocoa supply set to exceed demand by 165,000 tons in the 2020-2021 season, the International Cocoa Organization said in May. The ICCO had estimated at the time that Ghana would produce 950,000 tons this year.
Source: Bloomberg