Ghana’s decline in the revenue from cocoa which is one of its major export earners may not improve and even suffer a decline in the coming months if predictions by the Economist Intelligence Unit(EIU) comes to being.
The EIU in its latest report predicts a further fall of the price of the commodity on the world market.
Also, the EIU is predicting a decline in the production of cocoa for the 2018 season.
According to the report published by the Economist Intelligence Unit, cocoa production may drop due to challenges associated with old cocoa trees in the country.
This, coupled with a projected decline in the price of the commodity is expected to negatively impact on the revenue from the export of cocoa.
COCOBOD is targeting about 700,000 tonnes of cocoa production in the 2017/2018 season.
Already, government has maintained the producer price of cocoa beans for the 2017/2018 crop season at 7,600 cedis per metric tonne, despite the sharp drop in the price of the commodity from 3000 dollars per tonne to about 1900 dollars by the end of 2017.
Meanwhile, Ghana is said to be losing at least 1 billion dollars every year as a result of the declining prices of cocoa on the international market.
On the contrary, Ghana’s neighboring country, Côte d’Ivoire— which is currently the leading producer of cocoa has reduced its producer price to its farmers.
This, EIU warns will attract smuggling of cocoa from Côte d’Ivoire, due to a higher local price set by COCOBOD.
The result will be that Ivorian farmers will benefit from the sale of the beans to Ghana if they succeed in smuggling it into the country.
BoG Data on Cocoa
Data from the Bank of Ghana has shown that between August 2016 and August 2017, the price of cocoa on the international market, dropped from $ 2,993.5 to $ 1,947.6 per tonne.
This represents a 35 percent drop in the international price of the cash crop as at the time.
As a result, cocoa recorded the least growth in export revenue of about 16 percent; between the one year period.
Revenue from the commodity amounted to 1.99 billion dollars in August 2017, from the 1.72 dollars in August 2016.
Cocoa’s contribution to GDP rises
The 2017 second quarter GDP figures released by the Ghana Statistical Service show that the cocoa subsector grew by 15.6%.
The sector’s contribution to GDP went up from 64 million cedis in the second of last year to 74 million cedis in the same period this year.