Cocoa prices at 32-year high, but Ghana maintains purchase price

London cocoa prices have hit a new 32-year high on Wednesday as a result of rising demand, but Ghana maintains purchase price.

Cocoa which is widely used as a beverage and confectionery raw material in Europe saw an increase in usage in the second quarter of 2010. Usage in the quarter rose 13% to 328, 704 metric tonnes from 2009, and this is the largest increase since the third quarter of the year 2000, the International Business Times has reported citing European Cocoa Association data.

The data also indicates that cocoa grindings totaled 328,704 tonnes in the second quarter, an increase of 12.7% from a year ago and more than expected.

Earlier in May, the International Cocoa Organization (ICCO) estimated that global net production will total 3.56 million tons in 2009-2010 and reduce the ending stocks from 1.688 to 1.619 million tons, or 45% of annual use.

Cocoa for September delivery surged by 3.5%, to $3,153 a ton on ICE Futures. The commodity has gained 16% in the past 12 months.

Cocoa is Ghana’s major foreign exchange earner. Provisional data on the external sector indicates that Ghana’s total merchandise exports for the first quarter of 2010 amounted to $1.7 billion, a growth of 20.9% on year-on-year basis and cocoa beans and products earned $704.1 million dollars, an increase of 28.5% and gold earned $678.2 million, an increase of 16.5$, according to the Bank of Ghana.

These, the central bank said compared with 35.9% in the export of cocoa beans and products in 2009 and a decline of 4.4% in gold exports.

The Bank also indicated that concerns existed over the attainment of the 2009/2010 major season target of 650,000 tonnes of cocoa purchases.

By the first week of April 2010, only 518,304 tonnes had been purchased compared with 562,538 tonnes at the same time during the 2008/2009 crop season.

The crop size at the close of the 2008/2009 season was 634,256 tonnes.

The national regulator of the industry, the Ghana Cocoa Board has maintained the purchasing price of cocoa at GH¢2,400 per tonne of 16 bags.

By Emmanuel K. Dogbevi