Cocoa beans have long been one of the world’s cheapest crops. Now they are constantly setting new price records. This won’t change for a long time, because cocoa is grown differently than other crops – and that is now taking its toll.
The border police in Ivory Coast made a special catch on the border with Ghana this week. Three trucks were stopped and 1,500 bags were confiscated. Their contents: cocoa beans that were to be smuggled into a neighboring country where prices are higher. The business is worthwhile in times of rising cocoa prices. While the Ivory Coast government sets the price, Ghana is governed by the law of the market – and that has doubled the value of cocoa beans in just one year.
The cocoa crisis in Africa is slowly making itself felt in German supermarkets. Michele Buck, head of the chocolate giant Hershey, which, among other things, M
In the long term, chocolate will become even more expensive because there is an ever-increasing imbalance between supply and demand on the market worldwide. The countries in the African cocoa belt, especially Ivory Coast as the most important producer, cannot cope with the world’s demand for cocoa beans. Chocolate producers’ stocks have recently shrunk to a minimum. This year a deficit of 400,000 tonnes is expected, four times as high as last year.
The fact that little will change is, for once, not due to climate change. This also has an influence because cocoa trees react more sensitively to heavy rainfall than other crops and the 2022/23 harvest season was worse than expected, but cocoa has structural problems. While other crops from coffee to wheat are grown on a large scale by agricultural corporations, cocoa is still a product of small farmers. There are around two million of them in Africa.
There are historical reasons for this: With independence in 1960, Félix Houphouët-Boigny became the first president of Ivory Coast. Growing up on a farm, the goal of his 33-year reign was to make the country the world’s leading cocoa producer. He promised farmers land ownership if they grew cocoa and also used subsidies to attract farmers from the neighboring countries of Burkina Faso, Mali and Niger. When cocoa prices first shot to record highs in the 1970s, the country experienced an “Ivorian economic miracle”. Today its share of the global market is around 62 percent.
The custom of the government setting the price of cocoa in Yamoussoukro, the birthplace of Houphouët-Boigny, also dates back to this time. Every year it is estimated how much the kilogram will be worth on the world market. Farmers currently receive the equivalent of 1.53 euros, but the global price in January was around 4 euros – and the trend is rising. This is not a big problem for farmers in Africa in the short term. The current prices are enough to finance life there. But they prevent reserves and investments and that could now cost the world dearly.
The last major wave of planting new cocoa trees happened at the turn of the millennium, as the financial news agency Bloomberg reported in a column. Since cocoa trees live around 25 years, their yields are now dwindling. The Ivory Coast government had actively prevented new plantings in recent years so that more forests in the country would not be cut down. Such scruples should not exist anywhere else in the world. Producers such as Brazil, Peru and Indonesia enjoy high world market prices, but cannot produce enough to provide short-term relief on the world market. Only if the farmers in the Ivory Coast experience an increase in the price of cocoa next year would there be money left over for the renovation of the farms and thus perhaps a way out of the price dilemma in a few years.
Until then, however, climate change will continue to worsen, so it will be exciting to see whether the cocoa farms in West Africa can survive. Cocoa is not alone in this. The prices for coffee, sugar, oranges and many other crops have also been rising for years because the weather conditions in the growing countries are becoming increasingly difficult for farmers and their plantations.
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