CTA
Small fontsize
Medium fontsize
Big fontsize
English |
Switch to English
Français
Switch to French
Filter by Agriculture topics
Commodities
Regions
Publication Type
Filter by date

Cocoa moving ahead but challenges remain high

24 February 2013

At the start of the 2012/13 cocoa season in Côte d’Ivoire, cocoa deliveries to the ports from 3 October to mid November were running slightly ahead of the 2011/12 season (192,000 tonnes compared to 190,302 tonnes). In Ghana, however, cocoa deliveries registered a ‘very sharp fall of 34.2%’ during the first 3 weeks of the cocoa campaign, according to Cocobod (the Ghanaian Cocoa Board). While Cocobod attributed the decline to weather-related factors, it followed a drop in the value of the local currency and delays in payments to producers. (For details of trends in informal cross-border trade between Ghana and Côte d'Ivoire, see Agritrade Special Report ‘ Côte d'Ivoire’s cocoa sector reforms 2011–2012’, 16 December 2012).

At the end of November 2012, the International Cocoa Organization (ICCO) revised upwards its estimates of global cocoa production in 2011/12 to 4.05 million tonnes, from an earlier forecast of 3.96 million tonnes. However this was still a decline compared to the 2010/11 crop of 4.31 million tonnes.

ICCO Executive Director Jean-Marc Anga, in an interview published on Agence Ecofin’s website, underlined the ‘legitimate preoccupation’ of the industry over future supplies of cocoa. Currently, production is not evolving in line with growing consumer demand, which will be increasingly difficult to meet. Cocoa plantations are aging, while the average age of cocoa farmers is also rising. Problems of low productivity are further compounded by quality problems. For example, producers are facing problems in complying with new regulatory standards on cadmium levels, and ICCO is calling on the EU to allow more time before implementing the new cadmium regulation.

Dr Anga reported that efforts are underway to promote international cooperation to address these problems. One option being explored by governments is how to increase returns to cocoa producers through the expansion of local processing to include semi-finished cocoa products. These can then be delivered to consuming countries on a ‘just in time’ basis.

Efforts are also needed in some countries to strengthen the functioning of the cocoa supply chain. In Cameroon, for example, at the start of the harvest intermediary traders known as coxeurs purchase semi-dried cocoa beans from farmers at low prices that are not remunerative, but which ease the producers’ cash flow. Many consider that the intermediaries should be cut out of the chain so that producers can receive the full value of their dried cocoa beans. Cameroon’s Minister of Trade, Luc Magloire Mbarga Atangana, has called for a crackdown on the intermediaries, and for their cocoa to be seized and sold at auction, with revenues then going into the Development Fund for Coffee and Cocoa (FODECC).

Mr Atangana has also called on the Cameroon Cocoa and Coffee Board (ONCC) to disburse all but FCFA 30 per kilo of the FOB price of cocoa to producers and for ONCC to establish grouped sales on a scheduled time frame. It is thought that these and other measures would help Cameroon to reach its production target of 600,000 tonnes by 2020.

The issue of the use of child labour on cocoa plantations is also becoming a matter of growing public concern. In November 2012, the Louisiana Municipal Police Employees’ Retirement System filed a complaint in Delaware against US chocolate maker Hershey, requiring it to open its archives to public scrutiny to verify that all cocoa used by Hershey comes from sources certified as free of child labour. In 2011, a study undertaken by the University of Tulane highlighted the employment of some 1.8 million children in the cocoa sectors of Côte d’Ivoire and Ghana, often as unpaid labour.

Editorial comment

Cocoa farmers in West Africa are an aging population, as young farmers are not being attracted into the sector, despite the rising global demand and overall favourable price prospects. The potential for supply shortages is therefore causing concern among cocoa processing companies and end users. This has led to a range of corporate initiatives to support farmers’ organisations, boost production, improve bean quality and promote more sustainable forms of cocoa production.

Price volatility and rising input costs have led to renewed calls in producer countries for international cooperation to stabilise producer prices via minimum export price arrangements. While traditional approaches to export price stabilisation have long since fallen into disuse, there would appear to be a need to extend existing corporate initiatives on sustainable cocoa production to get to grips with economic and social sustainability issues faced by cocoa farmers, and to determine what role, if any, minimum producer price guarantees should play. This is still an area of considerable debate. Further discussions on how to ensure the economic and social sustainability of cocoa farming would appear to be necessary if the underlying lack of human and capital investment in cocoa production is to be addressed.

Intensified discussions would also appear to be necessary to explore how current technical and infrastructure constraints in ACP cocoa producing countries can be overcome, in order to promote more local value-added processing and enable more direct trading links to be established between ACP producers and expanding markets in Asia, in market components where this is appropriate. It needs to be borne in mind that the cocoa market is not homogenous, but is a highly differentiated market.  

Comment

Terms and conditions