Ghana, the world’s second-biggest cocoa producer, plans to halve the use of subsidized pesticides next season to cut costs after a drop in prices for the chocolate ingredient, the industry regulator said.
“We cannot maintain the schedule of free spraying with the dwindling fortunes of cocoa,” Noah Amenyah, a spokesman for the regulator, known as Cocobod, said yesterday in a phone interview from the capital, Accra. “We have to reduce these activities to meet our current low revenue.”
The board, which buys all cocoa produced in Ghana, targets the purchase of 830,000 metric tons in the season starting in October, from an estimated 800,000 tons in 2012-13. That compares with record output of 1 million tons in 2010-11.
Cocoa for December delivery advanced 2 percent to $2,502 a ton on the ICE Futures U.S. in New York by 11:54 a.m., bringing its decline over the past year to 3.8 percent, according to data compiled by Bloomberg. Prices may advance as much as 15 percent if drought persists in Ghana and Ivory Coast, the world’s largest cocoa producer, James Roemer, a meteorologist at WeatherRisk Institute, said Aug. 26. West Africa accounts for about 70 percent of global production.
The main crop of two yearly harvests in Ghana runs October to June, while the second, consisting mostly of smaller beans, is supplied from July through September.
The board will allocate funding for three applications of pesticides over cocoa farms in 2013-14 from six a year earlier, and it plans to eliminate the financing altogether in five years, Amenyah said. Fertilizer subsidies are being maintained.
The savings may help the board raise the price it pays farmers, enabling them to buy inputs, Amenyah said. “We are waiting for cabinet approval before implementation,” he said.