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Cocoa prices continue to rise due to crisis in African nations
Thursday, March 28, 2024 - 10:44
cacao Africa crédito foto Reuters

"The chocolate bars we eat will soon be a luxury; they will be available but they will be twice as expensive," says one consultant. In countries like Ghana, a perfect storm of rampant illegal gold mining, climate change, sector mismanagement and rapidly spreading diseases are to blame.

Looking at the desolate landscape of her farm, dotted with puddles of cyanide-tainted, tea-colored sewage left by illegal gold miners, is enough to make Janet Gyamfi break down.

Last year alone, the 27-hectare plot in western Ghana was covered with almost 6,000 cocoa trees. Today there are less than a dozen left.

"This farm was my only means of survival," the 52-year-old divorcee told Reuters, tears streaming down her cheeks. "I planned to pass it on to my children."

Ghana and its West African neighbor, Ivory Coast, face catastrophic harvests this season.

Expectations of shortages of cocoa beans - the raw material for chocolate - have caused New York cocoa futures to more than double this year alone. They have reached new all-time highs almost daily in an unprecedented trend that shows little sign of abating.

More than 20 farmers, experts and industry insiders told Reuters a perfect storm of rampant illegal gold mining, climate change, sector mismanagement and rapidly spreading diseases are to blame.

In its most sobering assessment to date, based on data collected since 2018 and obtained exclusively by Reuters, Ghana's cocoa marketing board, Cocobod, estimates that 590,000 hectares of plantations have been infected with swollen shoots, a virus that will eventually kill them. .

Ghana today has around 1.38 million hectares of land dedicated to cocoa cultivation, a figure that Cocobod says includes infected trees still producing cocoa.

"Production is in long-term decline," said Steve Wateridge, cocoa expert at Tropical Research Services. "We would not have had the lowest harvest in 20 years in Ghana and the lowest in eight years in Ivory Coast if we had not reached a tipping point."

It is a mess with no easy solutions that has shocked markets and could spell the beginning of the end for cocoa supremacy in West Africa, experts told Reuters. That can open the door to rising producers, particularly in Latin America.

And while millions of cocoa farmers in West Africa face a painful turning point, it is a change that will also be felt in wealthy consumer markets, possibly for years to come.

Easter candy shoppers in the United States are finding that chocolate on store shelves is more than 10% more expensive than a year ago, according to data from research firm NielsenIQ.

Since chocolate makers tend to cover cocoa purchases months in advance, analysts say the disastrous harvests in West Africa will only really hit consumers later this year.

“The type of chocolate bar we are used to eating will become a luxury,” said Tedd George, an Africa-focused commodities expert at Kleos Advisory. "It will be available, but it will be twice as expensive."


The roots of this season's implosion are visible in Samreboi, the community in the heart of western Ghana cocoa where Gyamfi lives.

Just three years ago, Samreboi had approximately 38,000 hectares of cocoa planted, according to the local Cocobod office there. Today, it has fallen to just 15,400.

Illegal miners began appearing in the area a few years ago, Gyamfi said. She had been resisting their threatening demands to sell them her plantation when, one day last June, she arrived to find it cordoned off. Armed guards blocked their entrance.

Bulldozers uprooted their cocoa trees. The miners invaded the property. Within six months, the gold ran out and the site was abandoned, leaving Gyamfi with unusable land contaminated with toxic chemicals, a loan he can no longer pay, and four children to support.

"I was traumatized," she said.

He said he pleaded with the police and Cocobod, but says he hasn't seen any reaction.

An agent from the local police station, who asked not to be identified, said they had received a complaint but did not remember if they had sent agents to the farm. He refused to consult police records.

Cocobod spokesperson Fiifi Boafo, upon learning of her case, said the board's legal department would get involved.

"But we are not the police or the courts," he said. "It is illegal to destroy cocoa trees, but the penalty is not punitive enough."

Across Ghana, cocoa plantations are giving way to gold miners, known locally as galamsey.

Cocobod told Reuters it had no updated data on the scale of the destruction. And although a study four years ago found that 20,000 hectares of cocoa had been lost to galamsey, five experts said mining has expanded rapidly in the intervening years.

"Now it's catastrophic," said Godwin Kojo Ayenor, a development economist specializing in cocoa. "It is covering almost all parts of the cocoa belt."

While some plantation takeovers are indeed violent, five farmers and community leaders told Reuters that more and more of them are becoming willing sellers.

For cocoa farmer Asiamah Yeboah, galamsey is just a symptom of a broader malaise. Since reaching peak production of more than one million tonnes in the 2020/21 season, Ghana has been declining. Production is forecast to fall to just 580,000 tonnes this year.

Yeboah says he harvested 50 bags of cocoa in 2015, but production from his 15-hectare plot fell to just seven this season. He does not earn enough to reinvest and is increasingly having difficulty finding workers.

“Before God and men, if they come to ask for my farm for mine, I will sell it,” he said.


Yeboah and other Ghanaian farmers blame Cocobod.

The agency, which has broad responsibility for regulating and promoting the sector, faces growing debt and this season had difficulty obtaining the syndicated loan it uses to finance operations and recover the harvest.

It suspended distributions of fertilizers and pesticides years ago. Plans to rejuvenate aging tree populations have made little progress. And it is losing the battle against what many consider an existential threat: the inflammation of the outbreak.

The virus first reduces yields before finally killing the trees. Once infected with swollen shoots, plantations must be uprooted and the soil treated before the cocoa can be replanted.

Cocobod has committed to rehabilitating affected cocoa plantations, using a portion of its funding of $600 million from the African Development Bank and another $200 million from the World Bank.

"With aging and diseased crops, the challenges seem daunting," Cocobod spokesman Boafo told Reuters. "But we have critical interventions underway to address them."

However, the 67,000 hectares covered by Ghana's rehabilitation program are nowhere near keeping pace with the disease's spread, experts say. Worse still, Cocobod says illegal miners are encroaching on some rehabilitated farms.

And in Ivory Coast, the world's largest cocoa producer, things are no better: Wateridge of the Tropical Research Service estimates that up to 30% of Ivory Coast's cocoa plantations are probably infected.

There is no quick fix, said Antonie Fountain, CEO of the VOICE Network, which is pushing for cocoa sector reform.

"A dead tree is not dead just for a season," he said.

Even after rehabilitation, replanted trees take two to four years to mature and produce beans. And a significant rebound in cocoa production in the two nations faces other major obstacles.

Researchers predict that climate change will make the crop more difficult to produce in West Africa in the coming decades and one study predicts that Ivory Coast's most suitable growing areas will shrink by more than 50% by the 2000s. 2050.

Precipitation patterns are already changing, with more concentrated periods of heavy rain and longer, warmer dry spells, said Bakary Traoré, head of Ivory Coast's IDEF forest conservation group.

"It's something we've already been seeing for the last few years," he said.

With West Africa struggling, current sky-high global prices will be an attractive incentive for farmers to plant more cocoa in other tropical regions, especially Latin America.

Both VOICE Network's Fountain and cocoa expert Wateridge predict that Ecuador will overtake Ghana as the world's second largest cocoa producer by 2027. Brazil and Peru could also step up.

Filling the supply gap will take time, however, and in the meantime, chocolate lovers should expect to feel the pressure.

But the real victims, say activists like Fountain, are small farmers in Ivory Coast and Ghana, who have few options as they watch their income evaporate.

"The situation for West African farmers is disastrous," Fountain said. "It's absolutely devastating."