Ghana sees 1 mln T cocoa output next season

DURBAN, (Reuters)

Ghana, the world's second-largest cocoa grower, could reach its target of producing 1 million tonnes of the main ingredient in chocolate next season -- a year ahead of schedule -- a senior official said on Tuesday.

Yaw Effah-Baafi, Deputy Minister for Food and Agriculture (Crops), said the West African country expects to produce around 850,000 tonnes of cocoa this season already, though much of it will remain off the books due to smuggling.

Much of Ghana's smuggled cocoa is believed to pass through Ivory Coast, the world's top cocoa producer, where farmers have enjoyed higher farmgate prices this year but locally-grown volumes are seen in decline.

"Next year we should be able to hit 1 million tonnes... we will look at areas which caused our shortfall and address those issues. One million is achievable next year," Effah-Baafi told Reuters on the sidelines of an Agribusiness Investment Summit. Effah-Baafi could not give any projections for this season's official figures published by industry regulator Cocobod, but said some 5-10 percent of produced volumes were likely to be lost to smuggling.

Cocoa purchases declared by private buyers to Cocobod since the start of the year-long season in October -- the best reflection of output from the West African state -- hit 615,880 tonnes by Aug. 12.

Ghana had previously said it would reach the 1 million tonne mark in 2012. Official volumes by the end of this season at the end of September are expected to come in below last year's record 705,000 tonnes.

BIOFUELS POLICY

The West African state is hoping to clamp down on smuggling with tighter border surveillance and is considering measures to keep its purchase prices competitive with neighbours Ivory Coast and Togo to discourage illicit trade.

The official said Ghana also plans to raise the amount of cocoa processed locally to 50 percent from the 35 percent which was likely to be processed in the country this season, to enhance the value of exports. Ghana, on track to become a commercial oil exporter after the start of production from the offshore Jubilee oilfield this year, is also hoping to boost other agricultural investment.

Effah-Baafi said the country would favour investments in maize, rice and cattle to reduce its reliance on imports. The country is also drafting a biofuels policy to ease investor access and Effah-Baafi said it was likely that it would be passed by the end of the first half of next year.

He said only a small percentage of arable land of marginal quality would be given up for biofuels to ensure that it did not jeopardise the country's food production. A study by an environmental group on Tuesday showed that biofuel demand was driving a new "land grab" in Africa, with at least 5 million hectares (19,300 sq miles) acquired by foreign firms to grow crops in 11 countries.