Ghana, the second largest cocoa producer in the world, is expected to see a huge fall in the volume of cocoa produced in the 2021/2022 season by 10 percent, according to the Bank of Ghana. Even though the Ivory Coast is also expected to see a decline in its cocoa production, it was forecast at just 3.0 percent.
The expected decline in cocoa production in the two countries is expected to weigh heavily on the World cocoa production for 2021/22 season which is set to decline by 3.0 percent from the previous season.
The Bank of Ghana highlighted that Ghana’s Graded & Sealed cocoa arrivals were up 33.4 percent in August 2021 compared to the previous season. This was higher than Cocoa arrivals in the Ivory Coast which were up 4.7 percent at the end of August 2021 from the same period last year.
The global outlook for cocoa looks very uncertain in the coming months as external factors are expected to impact on cocoa prices.
“The third quarter cocoa grindings are expected to be up 3.3 percent from the previous year. The larger cocoa grindings will underpin cocoa futures prices in the months ahead while ample global carryover stocks will weigh on futures prices in upcoming months. Nearby cocoa futures prices in September-December are forecast to average US$2,450-US$2,525 per tonne compared with $2,556 per tonne a year earlier”.
Bank of Ghana
Earnings from cocoa exports
Revenues from the export of Cocoa Beans were up by US$310.8 million between January and August 2021 compared to the same period last year. According to data from the Bank of Ghana, revenues from cocoa Beans amounted to US$1,379.3 million in the first 8 months of the year compared to the US$1,068.5 million recorded in the corresponding period of 2020.
The data however, show that earnings from cocoa beans are on the rise in the past three years, rising from US$950.8 million between January and August 2019.
A similar trend was observed in the Volume of cocoa beans exported in the first 8 months of each year in the past three years. Volume of cocoa exported rose to 537,306 tonnes between January and August 2021 from 433,812 tonnes in the same period in 2020. The rise in cocoa exports by 103,494 tonnes between January and August this year, represents a year-on-year growth of 23.9 percent.
The Unit Price of cocoa also rose from US$2,463.0 per tonne in the first 8 months of 2020 to US$2,567.0 per tonne in the corresponding period this year, a year-on-year change of 4.2 percent.
Developments in other major export commodities
Another major export commodity for Ghana is crude oil. According to the Bank of Ghana, Brent crude oil spot prices averaged US$71 per barrel in August 2021, down US$4 per barrel from July 2021. However, compared to the same time in 2020, crude oil prices have gone up by US$25.
The BoG stated that brent prices have risen over the past year as a result of steady draws on global oil inventories mainly due to increased mobility.
“The effects of the COVID-19 pandemic especially the new Delta variants continue to cast some uncertainty, though market fundamentals have strengthened. The production decisions of OPEC+ given an evolving demand outlook will also be a key price driver in the coming months. Brent prices are expected to remain near current levels for the remainder of 2021, averaging US$71 per barrel during the fourth quarter of 2021”.
Bank of Ghana
With regards to gold, the BoG disclosed that spot gold prices averaged US$1,785.67 per fine ounce in August 2021, a decline of 1.1 percent below July’s average price of US$1,805.15 per fine ounce. Gold performance was driven primarily by higher interest rates. The yellow metal was hurt by a stronger dollar as investors cautiously looked forward to US inflation data that could influence the Federal Reserve’s timeline for easing its bond purchases, the BoG stated.
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