'Ghana sold enough cocoa to service 2014 loan'

Ghana's cocoa regulator Cocobod has purchased 652,986 tonnes of cocoa in the 2014/15 season as of June 26, Deputy Finance Minister Cassiel Ato Forson told parliament, according to records seen by Reuters on Friday.

The amount is significantly down on last season but is sufficient to service the $1.7 billion cocoa loan Cocobod took out last year because the regulator forward sold just 624,500 tonnes as collateral, Forson said on Thursday.

Ghana's output this season falls short of its initial forecast of more than 1 million tonnes, a fact that has rattled the global cocoa market given that the West African country is the world's second-largest producer, behind Ivory Coast.

It will also reduce revenues for Ghana, which also exports gold and oil. The country has seen a sharp slowdown in economic growth due to lower global commodity prices and a fiscal crisis.

"Cocobod sold forward total tonnage of 624,500 and not 900,000 (tonnes) (as targeted). So far we have been able to buy 652,986 tonnes, so we would be able to service our obligations as and when they fall due," Forson said.

Some analysts have expressed concern that Ghana may have forward sold more cocoa than it can produce, jeopardising its ability to repay loans.

Forson's testimony in response to questions by the opposition New Patriotic Party would appear to allay those concerns with respect to the current season.

However, analysts say forward selling could also affect the regulator's calculations for next season, for which the government has requested a $1.8 billion loan. Ghana's output for next season is forecast at 900,000 tonnes, Forson told Reuters.

"Traders have stated they have an obligation via forward contracts to sell 150,000-200,000 tons of cocoa in excess of production. These contracts must be rolled forward at an expense to Cocobod," Eurasia Group said in a research note.

Cocobod usually sells forward around 60-70 percent of its projected crop estimates. The regulator has blamed weather and cyclical factors for the shortfall in production this season.

Some farmers say Cocobod's failure to make enough inputs, such as fertilisers and pesticides, available early in the season is another factor. In their absence, diseases such as black pod flourished, causing cocoa pods to wither on the trees.

Cocobod has extended the main crop season beyond its usual point but this week it wrote to Licensed Cocoa Buyers who purchase the crop asking for an estimate of purchases as of June 4, according to a letter to one buyer seen by Reuters.

The letter gave no indication of when the main crop would end and the light crop would begin. Several buyers told Reuters that purchases have dwindled sharply in recent weeks.