Global coronavirus shutdown hits Ghana’s cocoa exports and sales

A number of banks have stepped in to help Ghana Cocoa Board’s (Cocobod) with its annual pre-export financing after traditional lenders declined to underwrite the risk amid the global crisis, Reuters reported.

“The loan will back its 2020/2021 cocoa crop and is expected to be raised by a club of around 12 or 13 banks, providing ticket sizes of approximately US$75m, although the actual size hasn’t been decided yet, the sources said​.”

According to Bloomberg, commodity analysts said Cocobod owes purchasing agents and foreign-owned buying companies approximately GH ¢1.2bn ($208m).

Ghana, the world’s second largest cocoa producer, has suffered a potential loss of $1bn after prices declined from a high in February, the cocoa regulator said in a statement in April.

Bad weather

Plant disease and bad weather has also affected production, compounded by above average rainfall in the region this week.

Cocobod rasises $1bn annually for its annual pre-export financing underwritten by around four to six banks, before being syndicated to a wider bank group.

“Banks are not willing to take the underwriting risk. It will be a club loan with a group of around 12 or 13 banks, with a couple of banks acting as coordinators. This will be the first club style deal Cocobod has done since the financial crisis​,” a banker told Reuters.

“I’m confident that we will pay all outstanding debts owed to the licensed buying companies in the coming weeks​,” Fiifi Boafo, a spokesperson for Ghana Cocoa Board, told Ghanaweb.