Ghana Cocoa Buyers Seek $349 Million in Unpaid Dues as New Season Looms

Ghana's licensed cocoa buyers are pressing the industry regulator, COCOBOD, to settle about 4 billion cedi ($349 million) in outstanding payments from last season before the new crop year opens, the Chamber of Cocoa Marketers has said.

The chamber, which represents the country's licensed buyers, also cautioned that financing may not yet be in place to fund purchases once the season starts.

"Up till now, we have not seen any visible or reliable funding to show that COCOBOD is prepared for the opening, but we need money and a lot of it to be able to buy cocoa," said Vitus Dzah, the chamber's chief executive, in an interview.

COCOBOD did not respond to a request for comment.

Licensed buyers occupy an early position in Ghana's cocoa supply chain, purchasing beans from farmers and supplying them to COCOBOD, which in turn sells to processors and international traders.

Season start still unannounced

Ghana and Ivory Coast, the world's two largest cocoa producers, agreed in June to harmonise their farmgate prices and season start dates following a meeting between their presidents. However, COCOBOD has not yet informed licensed buyers when the new season will begin, even as Ivory Coast opened its season on September 1.

The regulator typically secures funding before the season opens, but it has faced financing difficulties since a decades-old syndicated loan arrangement with international banks collapsed during the 2023/24 season. A separate mechanism under which international trading houses pre-financed purchases also fell through last season, contributing to delays in payments to farmers.

In an interview with local radio on Tuesday, Jerome Sam, COCOBOD's head of public affairs, described the arrears as part of a routine reimbursement cycle. He said licensed buyers could pre-finance cocoa purchases, with COCOBOD reimbursing them later, as has happened in recent years.

Sam said COCOBOD plans to meet with licensed buyers to resolve the outstanding payments, without giving details. "All the necessary actions and decisions have almost come to an end, and we are hoping the government will soon announce the opening of the season," he said.

Local bridge financing explored

Dzah said COCOBOD was not required to fund licensed buying companies directly, since they must demonstrate their own funding capacity to obtain a licence. But he argued the regulator needed to secure and ring-fence its own financing so buyers can be paid promptly for cocoa delivered.

"We are saying that COCOBOD must get its funding ready and ring-fenced so that if we go out there and buy cocoa and deliver, there will be real-time payment for us to go back and then buy again," he said.

COCOBOD has been exploring raising about 2 billion cedi in bridge financing on the local market, sources familiar with the discussions said. Two pension fund sources and one bank source said lead arrangers contacted them last month about the facility, but had not followed up since.

COCOBOD's chief executive, Ransford Abbey, told local media last month that the board planned to raise money through local bonds and commercial paper in August, while the finance minister has previously said COCOBOD would issue local bonds in three tranches targeting pension funds and banks.