(Bloomberg) -- Ghana expects its cocoa crop to recover next season as favorable weather and timely supplies of pesticide and fertilizer help farmers claw back from a potential two-decade low that’s pushed prices to record highs. 

The world’s second-largest grower expects its harvest to reach 700,000 metric tons in the 2024–25 season that starts in October, according to two people with knowledge of the matter, who cited on-the-ground crop surveys. 

That would follow a third bad harvest in the current season, driven by bad weather and crop disease. Ghana can expect to harvest about 425,000 metric tons this season, the people said. That’s well below an already scaled-back official production estimate of 650,000 to 700,000 tons and would be the lowest since 2001-2002, according to data from the Ghana Cocoa Board.

The shortfall highlights the severity of the global cocoa deficit and has forced Ghana to postpone the delivery of about 250,000 tons of beans to traders into the next season. Tight supplies — top grower Ivory Coast has seen a similar downturn — saw prices topping $11,000 a ton this year.

For Ghana, the result has been a $575 million decline in export revenue for the first four months of 2024, denying the West African nation one of its main sources of foreign exchange to defend the currency, which has depreciated almost 14% against the dollar in the past three months, making it the worst-performing currency of those tracked by Bloomberg.

The weather has improved this year and the Ghana Cocoa Board has made sure farmers have the free chemicals and liquid fertilizers they need, the people said, asking not to be named as they are not authorized to speak publicly about the matter. The regulator, Cocobod, has also put measures in place to prevent the rampant bean smuggling experienced this year, one of them said. 

The regulator declined to comment on next season’s estimates, saying only that “Cocobod is dedicated to maximizing the potential of the upcoming season following the challenges faced this season,” according to spokesperson Fiifi Boafo.

A producer price review committee will be meeting near the end of the current season to determine a new farmgate price, Boafo said. The mid-crop harvest is expected to start in early July through September after the main-crop’s harvest closed on June 6, he said. 

The board will also boost efforts to stem bean smuggling, endemic this year as Ghana’s growers have sought higher prices in neighboring countries.

“Starting next cocoa season, all purchases will be made through the new Cocoa Management Systems which will record every cocoa BEAN sold at the farm-gate, so we can track if it’s not delivered,” Boafo said, adding that any licensed buying agent engaging in bean smuggling risks losing their permits.

The country is also putting in place measures to comply with European Union deforestation regulations set to kick from Dec. 30. 

“Farmers will be using special ID cards with codes and coordinates of their farms to ensure that all our beans are traced and compliant with the EU deforestation rules,” Boafo said.

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