Ghana's Cocobod to ask traders to pre-finance bean purchases in new funding model
By Maxwell Akalaare Adombila
ACCRA, Aug 23 (Reuters) -Ghana's cocoa marketing board, Cocobod, is fine-tuning a new funding model for bean purchases that will require global traders to deposit at least 60% of the value of their forward contracts at the start of the season, two sources told Reuters.
The new system will replace a three-decade old pre-export syndicated loan from international banks, which Cocobod said this week it would not raise for its 2024/25 cocoa season for the first time since 1992.
Ghana, the world’s second biggest cocoa producer after Ivory Coast, previously used the loan to finance bean purchases from farmers and shore up its reserves, helping to cool pressures on the cedi currency.
But Cocobod paid a record 8% interest on last year’s loan and now expects the new funding model to save it over $150 million in interest payments.
Under the new system, part of a trader’s deposit will be used to fund purchases from farmers via an existing partnership with a licensed cocoa buying company (LBC).
In this way, traders will work with LBCs by funding them to buy the cocoa, while Cocobod will act as an intermediary, said the source, requesting anonymity as they were not authorised to speak on the issue.
"Basically, we are saying traders work with LBCs and if so, they must fund them to buy the cocoa, but Cocobod will act as the intermediary," said the source, requesting anonymity as they were not authorised to speak on the issue.
"DON'T LEAVE ANYBODY BEHIND"
Much of Ghana's cocoa is bought by large, diversified trade houses with deep pockets, including Olam, Barry Callebaut, Cargill, Touton and Ecom.
Traders typically sign deals to buy beans - like any other commodity - months in advance in the hope of reselling later at a profit.
"With this (new) model, the trader pays the remaining 40% (of the contract sum) when picking the cocoa," the Cocobod source said.
Cocobod is yet to decide with traders if the pre-financing should attract interest or discount on beans supplied, it said.
President of LICOBAG, Samuel Adimado said if well-implemented, the model could address perennial delays in payments by Cocobod, raise buyers’ margins and reduce their costs with a potential reduction in bank loans to fund purchases.
"It requires discipline;if there's no cocoa, LBCs shouldn’t be given money. If the LBC receives money but can't find cocoa, it must return it. If these are properly applied, perfect," Adimado said.
Unlike multinational LBCs, local cocoa buyers lack trader partners, putting them at a potential disadvantage. Adimado said the model must recognise this.
"The question is, what will be the arrangement for them? It's very important to take care of the indigenous LBCs and strengthen them so that we don't leave anybody behind."
Cocobod will launch the 2024/25 season on Sept. 1, earlier than usual, with a reduced production target of 650,000 tonnes.
Reporting by Maxwell Akalaare Adombila
Editing by Alessandra Prentice and David Evans
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
