Ghana - Economy
Ghana - Economy - Cocoa
Ghana cocoa beans have long been known for their quality and depth of flavor. According to the International Cocoa Organization (ICO) Ghana cocoa is richer in Theobromine and Flavonoids which have given the beans the unique, mild and rounded flavor. As such the quality of Ghana cocoa beans have become the world’s standard against which all cocoa is measured. The International Cocoa Standards require cocoa of merchantable quality to be fermented, thoroughly dried, free from smoky beans, abnormal or foreign odor and free from any evidence of adulteration. It must be reasonably free from living insects, broken beans, fragments and pieces must be seasonably uniform in size. Manufacturers want beans that are fully fermented, not brown break, slaty or purple.
The cocoa industry has been the mainstay of the Ghanaian economy and provides the second largest source of export earnings representing about 30 percent of Ghana's total export earnings. Ghana is presently the world’s second largest producer of cocoa beans, after the Ivory Coast. According to the Bank of Ghana, cocoa bean and products export receipts for the first quarter of 2011 is $859.4 million, accounting for about 61 percent of total export earnings as compared with $682.5 million at 48.8 percent in 2010.
Observer forecasts for Ghana’s cocoa bean production in MY2011/12 was at 1.0 million MT. This forecast was predicated based on favorable weather conditions, improved farming practices and the continuing support of the Government of Ghana (GOG) to the sector. The GOG has been increasing the producer price of cocoa bean each year to encourage farmers to increase production of cocoa beans.
The producer price of cocoa was GHC3200 ($2133) per MT, up from GHC2400 ($1600) in 2009/2010. There was concern in the cocoa industry that the highly volatile international cocoa prices and the unwillingness of the GOG to accommodate any drop in price, left the country exposed to major external shocks. In a press release in September 2011 the GOG) stated that the cocoa bean crop yield for the MY 2010/11 have reached over 1,000,000 MT, the highest record ever. This record is 35.7 percent higher than the last full-year record of 740,000 MT, obtained in the MY2005/06 season.
The cocoa industry in Ghana is fully controlled by the GOG, having monopoly over the purchase and export of cocoa beans. The GOG established the Ghana Cocoa Board (COCOBOD) which is mandated to monitor and regulate the operations of the cocoa industry in Ghana. The high quality of Ghana cocoa beans has been diligently maintained over the years, through the effective quality control practices and monitoring at the time of purchase by the Quality Control Division (QCD) of COCOBOD. As part of their responsibility the Quality Control Division undertakes fumigation and disinfection of beans to ensure that only insect free cocoa beans are exported; rodent control is also carried out in all cocoa storage premises to prevent damage to the beans in storage; and inspection, grading and sealing of cocoa for the international and local markets.
The political instability in the Ivory Coast and the higher cocoa bean price offered in Ghana has encouraged the movement of cocoa into Ghana. Some market analysts estimate that about 30,000MT- 50,000MT of cocoa beans is being smuggled from the Ivory Coast to Ghana. Although GOG sources admit that, cocoa beans may be smuggled into Ghana but there are no official records. The Ghana cocoa beans are of higher quality than Ivorian beans. As such to maintain the high quality of Ghana cocoa beans over the years, the COCOBOD continues to be diligent in undertaking effective quality control practices and monitoring at the time of purchase. The influx of lower quality Ivorian cocoa if allowed could reduce the quality of the Ghana cocoa beans which may affect the premium price of the Ghana cocoa beans on the international market.
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