Ghana's cocoa regulator intends to borrow up to $1.5 billion by September in order to finance the purchases of cocoa for 2024–2025 and compensate for low output ss per two COCOBOD sources who are aware of the arrangement.

The world's second-largest cocoa producer, after neighboring Ivory Coast, relies on an annual syndicated loan to fund bean purchases from farmers. This loan is typically secured at the beginning of the season in September.

However, this year's $800 million loan encountered delays due to the season's low cocoa output.

COCOBOD has since withdrawn $600 million and canceled the remainder, as the season's cocoa output is projected to be nearly 40% below expectations, making it impossible to guarantee the full loan.

"A request for proposal sent to banks indicates COCOBOD will borrow up to $1.5 billion next season. It is understood the banks are sizing it and together (with COCOBOD), they will decide an optimal amount," said one COCOBOD source.

A second source from COCOBOD expressed confidence that the syndication would proceed as planned.

According to the same source, at least one international bank has visited Ghana to inspect cocoa farms before making a decision on the offer, with another scheduled to visit next month.

Production is anticipated to rebound to 810,000 metric tons next season, as per the sources, who preferred not to be identified as they have not been authorized to speak to the media.

COCOBOD did not provide a response to a request for comment.

Ghana's cocoa production has been impacted by adverse weather, diseases, and cocoa smuggling. It is projected to fall nearly 40% short of the target in the 2023/24 season, according to COCOBOD.

The regulatory body stated that approximately 150,000 tons of cocoa beans were lost to smuggling and illegal gold mining, locally known as galamsey, in the 2022/23 season.

It anticipates even greater losses this season due to a global increase in cocoa prices, which serves as an incentive for more smuggling.

Between 2018 and 2024, the swollen shoot virus decimated around 590,000 hectares of farmland, according to COCOBOD.

One source expressed confidence that Ghana would still meet next season's target of 810,000 tons, citing expected improvements in weather conditions and increased output from rehabilitated cocoa farms.

Ghana's cocoa export revenue plummeted by nearly 50% year-on-year in the first four months of the year, according to central bank data released this week.