Ghana is actively pursuing a $500 million loan from major cocoa traders to support its cocoa industry, as delays in securing its usual financing arrangements continue to pose challenges.

Sources from Citi Business News reveal that the Ghana Cocoa Board (COCOBOD) is in discussions with key cocoa traders, including Olam Group and Barry Callebaut, to raise part of the $1.5 billion needed to finance operations ahead of the upcoming cocoa season in October.

This $500 million loan is intended as a temporary measure while COCOBOD struggles to finalize its annual syndicated loan, a process currently delayed by concerns over crop yields.

This situation marks the second consecutive year that Ghana, the world’s second-largest cocoa producer, has had to rely on traders for interim funding.

The loan is vital for COCOBOD, as it is used to purchase cocoa beans from farmers, pay for fertilizers, chemicals, and seedlings, and help stabilise the nation’s currency.

However, lenders have expressed hesitancy due to a significant decline in cocoa production. This year, Ghana’s cocoa output is projected to drop to just over 500,000 tons, a steep decrease from the usual 800,000 tons.

The decline is attributed to unfavourable weather conditions, disease outbreaks, and fertilizer shortages.

In response to these challenges, COCOBOD is planning to start the cocoa season a month earlier in September to curb smuggling and allow time for the introduction of a new tracking system.

This system is designed to ensure that all cocoa beans are traced from the farm to the warehouse, in compliance with the European Union’s deforestation regulations.

Efforts to obtain comments from the cocoa traders and COCOBOD regarding the ongoing negotiations have so far been unsuccessful.