Decline in cocoa prices raises concerns over farmers’ future within the sector

Amid the all-consuming maelstrom that is the coronavirus pandemic, there are numerous other world events that have simply been parked or placed to one side amid the immediate health crisis.

One such issue, which we continue to re-visit as vital to the future of the confectionery industry is that of support for the cocoa sector supply chain in its core markets of Ghana and Ivory Coast, which make up around two-thirds of the industry.

The turbulence of global economies has already impacted on cocoa prices – which according to the International Cocoa Organisation, are presently standing at a concerning sum of just over $2100 per tonnes, several hundred dollars down on its previous value just a short while previously. This is a major concern on several levels, most notably in that such a low price will impact most harshly on those farmers who are at the start of that supply chain.

Its a factor that has not gone un-noticed on social media, with a number of key sources within the industry noting the potential severity of the present situation should it continue to deteriorate in the short-term.

With many in Ghana and Ivory Coast farmers already operating below established definitions of world poverty, so this fresh world crisis places further pressure on them to maintain an existence as best they can in some incredibly testing conditions. There had been light at the end of the tunnel with the united action proposed by the Ghana and Ivory Coast government proposals to create a living differential to offer subsidies amounting to $400 dollars per tonne to support farmers directly. But should the bottom-line prices continue to stutter, then hopes of ensuring a sustainable sector for those at the heart of the industry will begin to fade.

Backing for such a scheme has been signalled by major manufacturers including Olam, Barry Callebaut and Cargill, who have collectively pledged to play their part, in offering further support to farmers in terms of general community support and provision of advice and practical assistance in promoting farming best practices, and crop diversification. But without base incomes being increased by a fair degree, then such sustainability goals will be hard to achieve if the raw commodity prices remain suppressed in a disrupted global market.

While the coronavirus has reportedly so far yet to escalate in major fashion across Africa (where there are a reported 5,000 cases in total), that is a picture that could very rapidly change and cause further significant problems for limited health services across the continent.

Clearly, these are exceptional times on an international level from both a social and economic perspective, so maintaining a focus on supporting those most in need will be of vital importance if a world-wide confectionery sector, particularly with regards to the chocolate sector is concerned, can be maintained amid such major issues at the heart of the industry.

Thankfully, as we have covered over the past few years within the pages of Confectionery Production, major manufacturers have been stepping up their respective efforts in a bid to make a difference on this key issue. Tackling underlying issues of poverty will take a huge effort from governments, and civil agencies to make a tangible difference. Let us hope that on the other side of the major coronavirus, those working at the sharp end of the confectionery sector in Africa are not forgotten as the world grapples with a number of major sustainability and environmental issues.


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