If your favorite cocoa product is scarce or more expensive, here’s why:
Ghana’s cocoa processing companies are struggling due to lower cocoa bean supplies and higher international prices. This has forced many firms to cut costs and adjust operations as profit margins shrink. Citi Business News has reported a looming crisis in the industry, with many local companies affected by low yields.
They can’t get enough cocoa beans to meet their production needs, so they’ve had to cut back. This underutilizes machinery, causing inefficiencies and higher costs per unit. Some companies’ schedules are disrupted as they struggle to keep operations steady.
Citi Business News reports that products like chocolates, spreads, and pebbles from Cocoa Processing Companies have declined by 30% due to their inability to raise revenue for more cocoa bean processing.
Processed cocoa bean production dropped by 50%, with cocoa liquor, butter, and powder falling from 3,000 to 1,400 metric tonnes. This comes as the company recorded a $6 million loss in early 2024.
The decline is blamed on illegal mining, poor weather, and swollen shoot disease. Some farmers are selling large cocoa farms for as little as GHS 50,000. Additionally, cocoa smuggling to neighboring countries is a major issue.
Ghana’s cocoa output for the 2023/24 season is expected to be nearly 40% below the target of 820,000 metric tonnes, despite global cocoa prices reaching $10,000 per tonne this year.
In early 2024, Ghana’s trade balance tightened as cocoa exports declined, causing a 50% drop in cocoa output compared to the previous year.
Chocolate prices in Ghana, like Kingsbite, have surged to over GHS 20 per 100g bar from GHS 14 a few months ago, impacting consumers. Cocoa Processing Company is raising prices to boost revenue amid the shortage.
Consumers may switch to cheaper options, but demand exceeds supply, affecting sales for other businesses.
Citi Business News reveals operational challenges for cocoa processors like Niche, Chocomac, and Cargill due to cocoa bean scarcity. Continued issues could lead to job losses and potential closures of these companies.
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