ACCRA, Nov 16 (Reuters) – Private cocoa buying companies in Ghana said on Thursday they were unlikely to start exporting this season and the Ghana Cocoa Board”s (COCOBOD) export monopoly could continue through 2000/2001 despite planned liberalisation. “This year we had to write a letter to COCOBOD stating we were not ready for export,” one licensed buyer told Reuters.
COCOBOD, a state body, has a monopoly over exports which was supposed to have ended in October, at the start of the 2000/2001 season. The state-owned Daily Graphic newspaper said on Thursday that private buyers had asked COCOBOD to carry out exports on their behalf. It said that private companies would not be ready to export for at least another season. Before the season opened, private companies complained that COCOBOD had not drawn up guidelines on how the liberalised system would work, although some buyers said they needed to build up expertise first by working with COCOBOD”s export arm. Some local industry sources criticised COCOBOD for failing to give out export licences before the start of the season.
The sources said this meant that private companies did not have time to look for potential buyers or for private sources of finance. Access to finance is the major constraint on private cocoa buying companies. “In a bearish world market with thin margins and with the free fall of the exchange rate, the government is reluctant to change its policy,” a former COCOBOD official told Reuters, adding it wanted to hold on to the monopoly. “COCOBOD needed the 100 percent hand on the main crop to secure the Cocoa Seed Fund,” the licensed buyer said. The Fund is an internationally syndicated loan agreed by the government of Ghana to pre-finance upcountry cocoa purchases. Ghanaian cocoa buyers primarily use the Cocoa Seed Fund, since Ghanaian banks and banking laws are not yet able to cater for the large financing requirements of a privatised cocoa sector.
For the 2000/01 (Oct/Sept) season, the COCOBOD signed for $260 million in trade-financed debt, secured against forward sales of the crop. Ghana is the world”s second largest producer of cocoa after Ivory Coast.
