Low cocoa, maize production forecast for Ghana
Cocoa and maize production in Ghana will be low, according to a market report issued in July.
The Ghana Agribusiness Report Fourth Quarter 2013, issued by the Business Monitor International says it expects flat production from Ghana’s cocoa sector, “a function of potential harvest delays on the back of dry weather.”
“Over the long term, we forecast relatively pedestrian growth in cocoa production owing to reduced farm revenues and structural concerns in the sector, particularly labour,” it adds.
In its analysis, the report believes that the Ghanaian cedi will continue underperforming the CFA franc over the short term, which will put Ghana’s cocoa production at an advantage on global markets.
“This will happen even though we expect the recent rate of collapse in the exchange rate to stall when the government issues a eurobond of up to US $1bn and when Cocobod secures the next US dollar loan for the industry,” it says.
According to the report, the inflow of hard currency will help to support the cedi.
“Nevertheless, we expect this move to be only temporary as the exchange rate will potentially suffer more losses on the back of pressure on the current account and low investor confidence. Ultimately, we do not believe a depreciation in the cedi will be sufficient to reduce the Ivorian farmgate price discount compared with Ghana, which encourages cocoa smuggling out of Cote d’Ivoire into Ghana. Still, it is interesting to note that farmgate prices in Ghana are now at a 13.1% premium relative to their equivalent in Cote d’Ivoire, compared with 22.3% at the beginning of the 2012/13 season in September,” the report says.
The report also forecast mild production growth for Ghanaian corn in 2013/14, “the result of high prices during the planting season,” it says.
According to the report, over the long term, the country will largely maintain a balanced market.
For livestock, however, the report says it continues to expect Ghana to be a growing net importer of poultry over the long term due to strong demand growth.
The report gave the following as its forecast for cocoa production growth to 2016/17. It noted that production will be 10.5% to 950,000 tonnes, explaining that “this is a downgrade from our previous growth forecast owing to aging trees and the expectation that low prices will reduce farm revenues.”
On maize production, it says growth to 2016/17 will be 40% to 2.24million tonnes.
“Ghanaian corn yields remain low in relative terms, with production still dominated by smallholders making limited use of fertilisers, mechanisation, improved seeds and post-harvest facilities. However, a 50% fertiliser subsidy introduced by the government in 2008 is improving the situation,” it adds.
By Emmanuel K. Dogbevi