JOHANNESBURG, Nov 30 (Reuters): International buyers of Ghana's cocoa have made at least half a billion dollars of upfront payments to state marketing board Cocobod, according to Reuters' calculations, in a dash to secure supplies and avoid another season of heavy losses.
An abrupt overhaul of the three-decade-old marketing system in the world's No.2 cocoa grower has thrust traders and processors into a vastly expanded role in financing and bringing in the crop.
Previously, Cocobod would take on bank loans to buy farmers' cocoa, then sell the contracts for the crop forward to international companies.
But after being financially hobbled by declining production and management decisions, the regulator for the first time since 1992 did not secure syndicated financing to purchase this season's crop but instead is using the companies themselves.
Cocobod says bypassing the banks will slash costs. But the shift also marks a new era of risk for private players, the cocoa sector in Ghana and the global chocolate industry.
"They've totally become dependent on private players to manage everything," one small trader operating in Ghana said.
For now, the industry is on board, but further losses may see buyers turn elsewhere.
Failed harvests in top growers Ivory Coast and Ghana sent world cocoa prices to all-time highs in April while Cocobod found it had vastly oversold and was unable to meet contracts.
Cocoa futures are again on the rise, promising to drive prices for holiday chocolates up further.
"There's all the ingredients for bad things," said a cocoa fund manager, pointing to concerns over the new marketing model, an uncertain crop outlook and next month's election in Ghana, which could have major implications for the sector.
The fund manager, like most of the dozen other traders and sector players interviewed by Reuters, asked not to be named due to the sensitivity of commercial relationships in Ghana.
Cocobod officials did not respond to a Reuters request for comment on its new marketing system and industry concerns over the current crop.
