The global cocoa industry is grappling with unprecedented challenges as cocoa supplies tighten and prices surge, impacting chocolate manufacturers and consumers worldwide.
A report by SBM Intelligence highlights the significant setbacks faced by cocoa production, particularly in Ghana and Côte d’Ivoire, the world’s largest cocoa producers.
The report notes that adverse weather conditions and the rapid spread of swollen shoot disease have led to a substantial decline in cocoa bean production projections for the 2023/24 crop season in both countries.
This, coupled with illegal mining activities and political influences, has caused a severe shortage of cocoa beans, resulting in skyrocketing cocoa prices and impacting retail prices globally.
Efforts by the COCOBOD and the Côte d’Ivoire Coffee and Cocoa Council (CCC) to address the crisis include importing cocoa beans and urging cooperatives to sell stocks promptly to prevent hoarding.
However, major cocoa processing plants in both countries have either ceased operations or reduced processing due to the inability to afford beans at current prices.
The breakdown of regulated markets has further complicated the situation, with local dealers paying premiums above regulated prices to secure beans, leading to financial constraints for processors. Geopolitical events such as increased freight rates and export disruptions have also contributed to the rise in cocoa prices.
To address these challenges, the report suggests prioritizing measures to increase cocoa output and ensuring fair prices for farmers. It also recommends a more open market approach to enable Ghanaian cocoa companies to expand regionally and internationally. However, addressing these challenges will require political will, cooperation, and investment in research, infrastructure, and transportation networks.
Overall, the report underscores the need for proactive measures and innovation to overcome the current cocoa crisis and build a more resilient cocoa industry in Ghana and Côte d’Ivoire.