Danger! PBC Is Sinking …Over Uneven Competition

 Produce Buying Company (PBC), Ghana’s wholly owned Licensed Buying Company (LBC), is losing out on it shares in the cocoa buying market due to some lucrative illegalities some foreign LBCs have introduced in the name of competition. 

Information reaching the New Crusading GUIDE indicates that, some foreign LBCs are offering from GH¢10 to GH¢25 more to farmers than the stipulated amount of GH¢475 per bag from the regulator, Cocoa Board.

This behaviour has been confirmed by some cocoa fields’ workers in Twifo Praso and its environs as well as Dunkwa Area.

This rude flouting of the regulatory price is said to be hitting hard indigenous produce buyers who are obliging with the statutory producer price from COCOBOD for the year.

Over the years, PBC has remained the highest cocoa purchaser for COCOBOD among the other LBCs, with a market share of about 31 percent but current figures illustrates that the market share of PBC and other indigenous LBCs have been taken over by the foreign ones with their inducement.

For instance, COCOBOD shows that in 2015, PBC was the market leader, controlling approximately 31 percent of the entire market share of cocoa buying in the country.

Within that same period, OLAM barely controlled 16 percent of the market share. However, in 2018, the market share of PBC has dropped to about 16 percent while OLAM now controls over 25 percent of the market. Similar expansions replicates among the other foreign and private buying companies. For instance, Yonkopa, just 3 years of operation is the number 4 highest buyer.

Inside sources say the situation has deteriorated to the extent that PBC is likely not to be able to purchase even 250,000 tons of the Cocoa beans by close of 2018/2019 season in order to break even.

Looking at the trend, PBC may not be able to purchase up to 150,000 tons making it impossible for them to pay off their finance cost, staff cost and operational cost.

After few investigations into their conduct it emerged the flouters; including Yonkopa (Baricalibor), Eliho( Touton), Cargill, Fludo, OLAM and Amajaro ( Ecom, Agroecom) either double as processors or buy the cocoa for processors who add value to the beans to become chocolate, hence they have the financial muscle to induce the farmers with  little above the regulated price to get more bags of Cocoa beans from the farmers.

This behavior is actually killing PBC and the indigenous LBCs who are going according to the regulated prices. The foreign LBCS are also under stating their profits, hence GRA loosing revenues from them.

It seems GRA, National Security and Ministry of Agric/Finance are sleeping as consequences of PBC and local LBCs will be very disastrous even more than the collapse of the banks.

Meanwhile, industry experts attribute this to government’s inflexible producer prices paid Ghana Cocoa Farmers.

Immediately after Government announced the producer price of GH¢475, the minority members in Parliament poured discontent on government’s ‘low producer price’ to farmers despite significant premium it takes from the international market on behalf of the Ghanaian Cocoa farmers.

The minority argued that government of Ghana could easily pay farmers as much as GH¢ 550 per ton if it was truly passing on the premium to farmers.

But government explained that it could not increase prices it paid farmers above the GH¢ 475 it paid them per bag because prices had gone down on the international market.

Meanwhile, industry experts have called on the government and the regulator to crack the whip to whipping the ‘deviant’ LBCs to go according to the regulated producer price for a fair competition.

This, they believe, would keep PBC and the others who are being ‘bullied’ by some LBCs with their financial muscles from collapsing.