Ghana’s Cocoa Agency Seeks $1.8 Billion Loan for 2015-16 Crop
Category: Cocoa
(Wall Street Journal) – Ghana’s state-run cocoa regulator met with international backers Friday in London as it seeks to secure a $1.8 billion syndicated loan to finance the next cocoa growing season, an increase from last year’s $1.7 billion loan, according to a presentation from the meeting.
The meeting came amid a maelstrom over missing cocoa from this past season, as traders say they have been left in the lurch for promised shipments from the world’s second-largest cocoa producer.
The Ghanaian cocoa board, also known as Cocobod, said it had sold 850,000 tons of beans earlier this year, but a surprise shortfall in the latest cocoa crop has left the board at least 100,000 tons short, according to analyst estimates.
A Cocobod spokesman couldn’t be reached by telephone and didn’t respond to an emailed request for comment.
Despite the bean shortfall, the board has bought more than enough cocoa from farmers for the past season to repay last year’s loan, said Edward George, a soft commodities analyst at Ecobank who attended the meeting.
“They’ve easily bought enough cocoa to pay off their debts,” he said. Cocobod only needed to sell 614,500 tons of beans to meet their commitments, he noted.
Mr. George attributed strong interest in the loan by backers to Cocobod’s reliability in meeting payments, and a lack of attractive commodity deals in Africa.
The interest rate on the loan is expected to be the London interbank offered rate plus 0.625% percentage point a year, according to the document.
The deal is being arranged by Ghana International Bank, Standard Chartered, Barclays, Commerzbank, Deutsche Bank, Natixis, the Standard Bank of South Africa and Sumitomo Mitsui.
Cocobod said two tranches of the loan would finance the purchase of beans during Ghana’s two main cocoa crops in 2015/2016.
The deadline for the loan commitments will be on July 17, and the loan will be finalized on Sept. 17 in Paris, according to the presentation.
The next crop is the light crop, which is traditionally from May to August. In West Africa, the world’s main cocoa producing region, the light or “mid” harvest makes up 15% to 20% of the total crop, according to the International Cocoa Organization. The main crop runs from September to March.
