Home Agriculture How Africa can reap more benefits from her cocoa production

How Africa can reap more benefits from her cocoa production

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Four West African countries (Ivory Coast, Ghana, Nigeria and Cameroon) are responsible for producing up to 70% of the world’s cocoa beans. Ivory Coast and Ghana together produce 60% of the world’s cocoa.

However, of the over $100 billion spent annually on chocolate, the African Development Bank reckons Africa keeps just about $5 billion, only 5% of annual chocolate revenue. This is largely because the African countries mostly focus on production and not processing and chocolate production where most of the revenue is derived from. Global cocoa production hit 4.85 million tonnes last year, but according to the International Cocoa Organization, Ivory Coast ground just 559,000 tonnes of cocoa beans last year.

For example, the United States which imports cocoa beans from Ecuador, is one of the top producers of high-quality chocolates, with US chocolate manufacturers bringing in over $20 billion annually in retail sales.

With a total of about $56 Billion in annual retail sales, United States ($20 Billion), Switzerland ($14 Billion), Belgium ($12 Billion) and Germany ($10 Billion) are the top four biggest producers of chocolate in the world. Together, these four countries account for about 35% of the total world chocolate production. However, none of these countries are major cocoa-producing countries.

Cocoa is sweet but chocolate is sweeter

Globally, demand for chocolate is growing faster than cocoa production and while this provides a good opportunity to raise the price of cocoa, the real value and revenue lies in chocolate production within Africa.

Focusing largely on production, African countries have tried to increase revenue from cocoa sale, but that is clearly not the only solution. Cocoa prices were well above $3,000 a ton for most of the period from 2014 to 2016, but the price since fell. Ghana and Ivory Coast recently reached an agreement not to sell cocoa for less than $2,600 a ton for the harvest that will begin in October 2020. This move sent cocoa prices to $2,552 but there is yet more to aim and aspire towards, if the goal is to derive more value from their cocoa.

The African countries say they are setting the price floors to improve workers’ pay in the industry, but the solution to making a real impact lies in cocoa processing and not just growing it. A popular example is Indonesia which moved from cocoa exports of 80% in 2010 to 5% in 2017, choosing to focus rather on processing which increased its proportion of value-added cocoa exports to 95% as at today from less than 20% in 2010.

Culled from a Facebook post

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