According to a senior official from the Ghana Cocoa Board (Cocobod), Ghana has lost more than a third of its cocoa output for the 2023/24 season due to smuggling, as reported by Reuters.
Farmers facing delayed payments and lower local prices are increasingly turning to sophisticated smuggling networks.
Cocoa production in Ghana, the world's second-largest producer, alongside Ivory Coast, the largest, has struggled this season, contributing to a four-year supply deficit that has driven global cocoa and chocolate prices higher. In neighboring Ivory Coast and Togo, cocoa commands higher prices due to a more stable currency and less regulation.
By the end of June, Ghana had produced 429,323 metric tonnes of cocoa, representing less than 55% of the average output for this time in previous seasons. The 2023/24 season is on track for the country's largest 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. Despite these losses, the anti-smuggling task force has intercepted around 250 tonnes, a significant increase from just 17 tonnes last season.
“The data is alarming,” said Abubakar Omae, general secretary of Ghana's cocoa and coffee farmers association.
While over 10 individuals have been sentenced to prison for smuggling, Amenyaglo noted that Ghana’s military will soon be deployed to bolster efforts against traffickers.
The rise of smuggling networks can be traced back to Ghana's economic and currency crisis in 2022. Cocoa is trafficked into Togo, Burkina Faso, and even Mali, with smugglers employing creative methods, such as hiding cocoa in tipper trucks covered with quarry chippings and disguising it in fuel tankers.
Cocobod’s financial struggles, exacerbated by issues with its syndicated loan for purchasing cocoa beans, have delayed payments to farmers, making them more vulnerable 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.
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%. While farmers are hopeful these measures will help, concerns remain 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.
Credit:Graphic Online.
