Accra, May 12 - Ghana's cocoa industry regulator Cocobod is close to sealing a deal with U.S. agribusiness giant Cargill to build a cocoa processing facility in the world's second-biggest producer, the Cocobod chief said.
"We are close to signing a bean supply agreement (with Cargill)," Isaac Osei, the regulator's new chief executive told Reuters in an interview late on Thursday.
"We could sign in the next month," he added.
Talks with cocoa firm Archer Daniels Midland about setting up a second processing facility are ongoing, he said.
Osei took office in early April and has been tasked by Ghana's President John Kufuor to increase the percentage of its cocoa which Ghana processes and restore efficiency to an industry racked by logistical problems.
Cocoa is one of Ghana's biggest export earners and about 20 percent of its crop is processed locally.
Some processors fear there will not be enough of the cheaper light crop beans, which account for about 25 percent of the country's 600,000-tonne harvest, to meet demand from the country's current three processors and new entrants.
"People who process cocoa don't use only light crop beans. They can import beans. We can sell them light crop beans when we have them," he said.
"If it is not available we will give it to them on a pro rata basis, so no one (processor) is disadvantaged," he added.
The 2005/06 season has been characterised by fights between local buyers and regulator Cocobod over a shortage of bean storage space and jute sacks as well as congestion at the port.
New warehouses and better management of existing space should ease congestion problems at Ghana's ports, Osei said.
A 50,000-tonne warehouse in Tema port will open in June, while the regulator can also lease more warehouses in Tema should the need arise, he said.
The regulator may also build a warehouse in Takoradi, from where the bulk of Ghana's cocoa is exported.
"In Takoradi we are looking at probably building 100,000 tonne capacity (warehouse). That would be in our next budget year. We are in the planning phase," he said.
The regulator will also ensure there are enough jute sacks, he said.
"The problem is a thing of the past," he said.
In Ghana's semi-liberalised market, buyers purchase beans from the farmers and sell them to the regulator for export. Many buyers frequently complain of low profits and question the viability of the business.
Osei said: "If they feel it is not viable, they would not be in the business. If any buyer feels it is not a profitable business, I am sure he would be out."
"There is competition among them and many of them should have facilities up country but they don't so they cannot expand."
Some buyers would like to export a percentage of their beans to enable them to maximise profit but Osei said that further liberalisation is not on the cards.
"Cocoa Marketing (the export arm of Cocobod) will remain the sole exporter of Ghana cocoa. It has worked for Ghana and we have no reason to change it," he said.
The regulator is currently speaking to banks about its annual syndicated loan, which it uses to advance money to buyers to purchase cocoa from the farmers.
"We normally invite about 60 banks to participate. It will either be a consortium led by Standard Chartered or Societe Generale," he said.