News Excerpt: 

A shortage of cocoa beans has led to a near shutdown of processing plants in Ivory Coast and Ghana, the two countries responsible for 60% of global production.

Reason for cocoa production declined sharply in west Africa:

• Three factors are at play: environmental, economic cycle related and human.
• Environmental factor is the impact of the El Nino weather phenomenon, which has caused drier weather in west Africa. It has contributed to problems on farms, such as the swollen shoot virus disease. As a result, Ghana has lost harvests from nearly 500,000 hectares of land in recent years.
• The economic cycle of cocoa production refers to the inherent patterns of expansion and contraction in cocoa farming. For example, as cocoa trees age, they become susceptible to diseases, requiring high maintenance costs.
• Historically, farmers have tended to abandon old farms and start anew in fresh forests. 
• Unfortunately, finding new forests is now increasingly difficult. Perhaps the most severe issue of all is the lack of fair compensation for sustainable cocoa production
• The human factor includes challenges such as illegal mining, which has overtaken numerous farms in Ghana. Sometimes, farmers lease their land to illegal miners in exchange for payment. These mining activities degrade the quality of the land, making it unsuitable for cocoa cultivation.
• The global market for chocolate and chocolate products is on the rise. It is projected to grow faster than 4% annually over the next few years. This growing demand for cocoa underscores the urgency in addressing the intertwined issues that relate to the industry’s sustainability.

How have cocoa farmers and cocoa-producing countries’ economies been affected?

• At the farm level, although the rise in prices may initially appear beneficial to farmers, the reality is not straightforward. 
  • A decrease in output leads to fewer harvests on average, which means that, overall, farmers are not earning more. 
  • This issue is compounded by recent economic challenges in west Africa, such as high inflation and currency devaluation, particularly in Ghana. 
    • These factors have resulted in farmers becoming poorer.
• Another impact of the output decline is a reduction in local processing. 
  • Major African processing facilities in Ivory Coast and Ghana have either ceased operations or reduced their processing capacity because they cannot afford to purchase beans. 
• This likely means that chocolate prices worldwide will surge. This, in turn, adversely affects the local production units that have been emerging in recent years.
• However, the bargaining power of west African cocoa-producing countries seems to have increased. 
  • Now is an opportune moment for these nations to unite and negotiate more favourable terms for their cocoa farmers.

Impact of this situation on chocolate makers and cocoa alternatives

• It’s inevitable because continuing to cultivate cocoa under current conditions is unsustainable. 
• The German company Planet A Foods is a leader in this area. It produces cocoa-free chocolate, using technology to transform ingredients such as oats and sunflower seeds into substitutes for cocoa mass and butter.
• Overall, this is beneficial for everyone. 
• The demand for cocoa has resulted in mass deforestation and significant carbon emissions, issues that are likely to worsen due to climate change. 
• Moreover, the push for cultivation has led to various forms of labour abuses. 
• Exploring cocoa alternatives is certainly part of the solution.

Conclusion:

Hence the current situation related to cocoa in west africa has both positive and negative impact on various stakeholders. It will affect world order in cocoa production and trade.