Cocoa grinders run at 36% capacity

Cocoa processing plants are running at only one-third of their production capacity as a result of inadequate supply of light crop beans to feed the plants, says an industry report seen by Reuters on last week.

The report, written after the cocoa conference in Accra last week, said local cocoa processing companies were working at an average of 36 per cent capacity because demand for beans from the light crop far exceeds production, while main crop beans are too expensive for some factories to buy.

As part of President John Atta Mills’ government policy to boost domestic revenue by encouraging more value-added processing, national marketing body Cocobod discounts beans from the minor light crop season, which runs from May to September in the world’s second-biggest grower, to local processors.

That crop output has dwindled while processing capacity has increased, leaving grinders either to pay more for main crop beans, or leave capacity idle.

Ghana’s light crop average 50,000 tonnes, compared with installed local processing capacity of 360,000 tonnes.

“It is a major concern producing at only a third of your capacity while your machinery lies idle,” a local processing company manager said. “As an industry this is not good news and we can’t continue like this.”

Percival Yaw Kuranchie, chairman of Cocobod’s board of directors told Reuters the marketing board would review its relationship with local grinders.

“It’s a challenge because we’ve seen a reduction in the light crop over the years and we believe the time has come to take another look at this policy,” he said.

Some participants in the meeting said processing companies had proposed that a portion of beans from the larger main cocoa season, which is mainly exported, should be discounted to them for grinding.

Seven firms grind cocoa in Ghana, including U.S.-based Cargill agribusiness giant Archer Daniels Midland and chocolate manufacturer Barry Callebaut.
Ghana has set an ambitious target to raise production to 1 million tonnes by 2012 using increased fertilisation and stronger incentives for farmers.

Production at the end of last season totalled 710,000 tonnes.

Source: B&FT