Gabriel Kwesi Enoku rakes the dried cocoa beans with his hands. He doesn’t have enough to fill a 64-kilogram (141 pounds) sack on his farm in western Ghana.
By this time last year he had stuffed five.
“This season has been scary,” Enoku said in an interview on April 18 in Enchi, about 423 kilometers (263 miles) northwest of the capital, Accra. “It isn’t going well at all. There aren’t enough cocoa pods on the trees.”
Enoku is one of the 800,000 cocoa farmers in Ghana who are bracing for the smallest harvest in five years because of dryness and a fungus that kills pods, according to analysts and grinders. For the world’s second-largest producer of the crop it means tough times for everyone from farmers to the government.
The reduced crop will only worsen Ghana’s economic outlook after the plunge in oil prices, Godfred Bokpin, head of the finance department at University of Ghana’s Business School, said by phone. Cocoa exports are the third-largest source of foreign revenue after gold and oil.
“It is a concern for the managers of the economy,” Bokpin said from Accra on Tuesday. “Unlike the other commodities, we have control over cocoa. So if we cannot produce more revenues we will be hit.”
Ecobank Transnational Inc. cut its forecast for Ghana to as low as 730,000 metric tons last week, below the government’s estimate of 850,000 tons. That’s about half of what Ivory Coast, the world’s largest producer and Ghana’s neighbor, expects to harvest. The season runs from Oct. 1 to Sept. 30. A spokesman for Accra-based Cocoa Board, the state-owned regulator, declined to comment.
The poor outlook for Ghanaian cocoa “caught everyone by surprise,” Nicko Debenham, vice president of cocoa sustainability at Barry Callebaut AG, the world’s biggest grinder, said in an interview in Lausanne, Switzerland, on Tuesday.
Seasonal winds known as the Harmattan were severe this year, knocking flowers that develop into cocoa pods off, and rainfall will be below average, according to the nation’s meteorological service.
The 2.2 percent increase in cocoa prices in the past 12 months to 1,923 pounds per ton are not enough to make up for the shortfall, Bokpin said. Ghana gets 81 percent of its foreign exchange from cocoa, gold and crude oil and the central bank uses it to boost reserves to support the currency.
Finance Minister Seth Terkper cut the economic growth forecast to the lowest in 20 years and said the government would miss its target for the fiscal gap after oil prices plunged 52 percent last year. That’s put pressure on the currency, which has dropped 27 percent this year against the dollar, making it the worst performer in Africa out of 24 currencies tracked by Bloomberg.
Tighter government finances affect farmers, who look to the Cocoa Board for help to buy fertilizer and chemicals to protect against diseases that threaten crops. That money hasn’t been distributed to everyone this year, said Kwesi Addai, who owns 12 acres in Opon Valley in Western Region.
His trees are yielding fewer pods this year because he didn’t get access to chemicals and the lack of rains.
“The weather worked against us this year,” Addai said. “I am going to struggle to pay my children’s school fees.”