Ghana's Cocobod signs $1.3 billion syndicated loan for cocoa buying

Ghana's Cocobod signed a $1.3 billion loan with international banks on Thursday to finance beans purchases for the 2018/19 season and is seeking additional funds to boost farm productivity, its director said. Joseph Boahen Aidoo said Cocobod was in talks with lenders for a $300 million medium-term facility to fight cocoa diseases, expand hand pollination and other agronomic practices aimed at increasing yield.
Ghana, the world's second largest producer, uses loans from international banks every year mainly for bean purchases. It aims to buy at least 900,000 tonnes of cocoa from farmers in the upcoming season starting early next month.
"We've decided that we must have a separate financing, apart from the annual facility, to prosecute medium-to-long term programmes. We have already had favourable conversations with the banks and this afternoon we're meeting to look at some of the arrangements," Aidoo said in a video call with reporters in Accra after Thursday's signing in Amsterdam.
The annual loan, the largest pre-export soft commodity financing facility in sub-Saharan Africa, was oversubscribed by $550 million, or 42 percent. Lead arrangers were Amro Bank, Bank of China, Standard Chartered Bank, Industrial and Commercial Bank of China, and Ghana International Bank.
Some 21 lenders participated and Cocobod will repay over 12 months with an interest rate of Libor plus 0.625 percent. Cocobod expects to draw down the first tranche of the syndicated $1.3 billion in early October to give to buyers for the purchases, he said.
For the first time in decades, Ghana and Ivory Coast will simultaneously announce farmers' producer prices on Oct. 1, as part of an agreement to harmonise marketing and other industry activities, Aidoo said.
Two senior Cocobod officials told Reuters Ghana's cocoa price setting committee had begun meetings ahead of the Oct.1 announcement, but they declined to indicate whether there will be any change in price. Ghana currently pays its farmers 7,600 cedis per tonne of cocoa. Aidoo said purchases tally for the 2017/18 crop year, which closed on Sept 13, reached 903,000 tonnes, almost the same level as the previous season.