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22.11.2005 General News

Sufficient funds released for cocoa purchases

By GNA
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Accra, Nov. 22, GNA - The Ghana Cocoa Board (COCOBOD) on Tuesday said it had released sufficient funds to Licensed Buying Companies (LBCs) to purchase cocoa this season.

Mr Kwame Sarpong, Chief Executive Officer, addressing a press conference in Accra on recent developments in the cocoa industry, said 764 billion cedis was released as seed funds for October while an additional amount of 1.031 trillion cedis was released in November for this crop season's purchases.

He said this compared to 815 billion cedis released in October and 1.025 trillion in November l2004.

Mr Sarpong said for this year, additional funds would be released when COCOBOD took delivery of a reasonable tonnage of cocoa for which the earlier funds were released.

Mr Sarpong, who was reacting to media reports about the cocoa industry said: "The world cocoa market is very sensitive and complex and thrives on every piece of information about producing and consuming countries.

"Statements or criticism about the cocoa industry for public consumption must take cognisance of these facts and be constructive in order to protect the good image of the industry."

Mr Sarpong said in the 2003/04 season; when COCOBOD purchased the highest volume of cocoa of 736,629 tonnes; 1.499 trillion cedis was released as seed fund in October and November of 2003 as compared to this year when 1.795 trillion cedis had been released for the same two months.

He expressed the belief that farmers were not receiving their payments at a fast rate leading to some of the media reports. This is because of the insistence of COCOBOD that the farmers be paid by the LBCs with the Akuafo Cheque only.

"We believe the LBCs are adhering to this practice and that perhaps is what is slowing down payment to farmers. But we expect that when the farmers accede to this arrangement, the payment will become smooth," he said.

On the payment of bonuses to cocoa farmers, Mr Sarpong said it had been alleged that COCOBOD and Government had diverted some 16 billion cedis meant for payment of farmers' bonus for other purposes. Proponents of such statement based their conclusion on cocoa production of both the main and the light crop seasons, he said, explaining that that bonuses were paid for cocoa but during the main crop season only and delivered by LBCs to Cocoa Marketing Company (Ghana) Limited.

"Using the 2003/2004 cocoa season performance as a case in point, purchases for the year were 736,629 tonnes. However, COCOBOD paid bonus based on the main crop purchases of 668,324 tonnes, and thus giving a total of 161.199 billion cedis.

"We do not pay bonus on the light crop because the price is subsidized. In practice, COCOBOD sells the light crop beans at a discount of 20 per cent to the local factories.

"This means that even though the light crop price is discounted, all stakeholders with the exception of COCOBOD get the same benefit for the light crop as for the main crop."

Mr Sarpong said it was for this reason that COCOBOD was advocating differential pricing between the Main Crop and Light Crop beans as was being done in other producing countries.

On congestion at the Tarkoradi Port, Mr Sarpong said the phenomenon might be due to the LBCs rushing to beat the October 13, deadline set by COCOBOD to deliver all the Light Crop purchases.

"Another reason might be due to the abuse of quotas set by COCOBOD for the smooth delivery of cocoa to the ports. Some LDCs deliver in excess of the quota. While COCOBOD and Cocoa Marketing Company are handling the trucks based on these quotas, the excess delivery creates apparent congestion at the ports, even though there may be ample warehousing space."

Mr Sarpong noted that not all trucks seen at the ports were carrying cocoa.

He said while previously it took four to five days for trucks from Akontombra and Kasapim in the Western Region, for instance, to reach the port, it now took only a day to get to the port from the two areas due to improvement in the state of the road network. Mr Sarpong said new warehouses under construction at the Tema port would soon be completed, adding that adequate arrangements had been made at Takoradi and Kaase in Kumasi to receive cocoa in the meantime.

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