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Top officials of Ghana Cocoa Board (COCOBOD) are in London making presentations to major banks to secure a pre-export finance loan worth US$2billion to purchase cocoa in the upcoming crop season, sources close to the deal disclosed.
“After London, the officials will move to Paris for another presentation. These are all part of our road show to raise the targeted amount for 2011/12 season,” added the source.
The banks for the loan will be announced in September. This year’s facility is the biggest ever to be raised by Cocobod.
Last year, Ghana secured commitments worth US$1.5billion to fund cocoa purchases for export in the 2010/11 season, 25 percent more than targeted.
The transaction was oversubscribed at US$1.834 billion and the borrower increased the facility size to US$1.5 billion, though the transaction initially was set at US$1.2 billion.
Last year’s facility was put together by a group of international and local banks led by the Credit Agricole and Investment Bank, which is headquartered in France.
Ghana, the world's second-biggest cocoa grower after neighbouring Ivory Coast, has set itself the target of purchasing at least 1 million tonnes of cocoa by end of the 2012-13 season.
Supplies from Ivory Coast were disrupted in January after President Alassane Ouattara ordered a ban on cocoa exports to cut off funds to former leader Laurent Gbagbo, who refused to cede power after losing a Nov. 28 election. Gbagbo was captured on April 11 and Ouattara ended the ban by April 15.
Ivory Coast’s crop will be 1.3 million tonnes in the year that started October 1, compared with output of 960,000 tonnes in Ghana, according to the International Cocoa Organization (ICCO). Ivory Coast’s crop will be 4.7 percent bigger and Ghana’s 52 percent larger, ICCO estimates show.
According to Cocobod, cocoa main-crop purchases for the 2010/11 season reached a record 916,000 metric tonnes, making it the highest in the history of Ghana’s cocoa production.
This was 56 percent above last year's levels and the most since the country registered its name on the international market as a producer of cocoa.
Cocobod has dismissed reports that the record was contributed to by large amounts of beans being smuggled into Ghana from Ivory Coast.
“The record production has been the result of concerted efforts by government, farmers, Ghana Cocoa Board and major players in the industry through adherence to good agronomic methods, modern farming processes, payment of remunerative prices for the produce, development of hybrid cocoa seedlings, application of fertilisers, disease and pest control, and scientific research," said Cocobod.
It estimates that the 11-week light-crop, which started on June 3, will range between 70,000 and 100,000 tonnes.
Cocoa officials say the sector employs around two million people in Ghana, and accounts for about 40 percent of the West African country's foreign exchange revenues.
Source: The B&FT
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