Boston, MA -- (ReleaseWire) -- 03/11/2013 -- BMI View: Ghana's cocoa sector will remain a vital part of the country's agricultural industry in the coming years. Production declined significantly year-on-year in 2011/12, and we are forecasting a mild improvement in 2012/13 owing to better weather conditions. We see the country's overall food security remaining fairly stable; there was a significant moderation in prices towards the end of 2012 as new grain supply from the 2012/13 harvest came online. Over the long term, production could grow considerably should genetically modified seeds be adopted. This is now possible after changes to bio-safety laws in 2011. We believe that poultry production and consumption will see the most growth among the livestock complex owing to price competitiveness and local preferences.
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- Cocoa production growth to 2016/17: 15.1% to 990,000 tonnes. Yield gains are likely to continue. Rising GDP will allow easier credit access to cocoa farmers looking to expand production.
- Corn production growth to 2016/17: 40.0% to 2.24mn tonnes. Ghanaian corn yields remain low in relative terms, with production still dominated by smallholders making limited use of fertilisers, mechanisation, improved seeds and post-harvest facilities. However, a 50% fertiliser subsidy introduced by the government in 2008 is improving the situation.
- 2013 real GDP growth: 9.2% (up from 7.6% in 2012; predicted to average 8.7% from 2012 to 2017).
- 2013 central bank policy rate: 15.5% end-2013 (up from 15% in 2012).
- 2013 consumer price index (average): 10.2% (up from 9.2% in 2012)
The progress of Ghana's 2012/13 cocoa harvest continues to improve, and we continue to expect production this season to exceed last year's total, which contributes to our view for lower average cocoa prices in 2013. Cocoa had been one of the best performing agricultural commodities in H112 due to concerns that cocoa output from West Africa would follow the disappointing 2011/12 season with another mediocre year.
However, it now appears that production is on track to at least meet the 2011/12 total. The Harmattan winds that normally arrive in February are a downside production risk, albeit a minor one at this point.
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