Chocolate prices keeps rising as West Africa’s cocoa crisis deepens

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REUTERS :
Surveying the stripped landscape of her farm – dotted with pools of cyanide-tainted, tea coloured waste water left by illegal gold miners – is enough to make Janet Gyamfi break down.

Only last year, the 27-hectare plot in western Ghana was covered with nearly 6,000 cocoa trees. Today, less than a dozen remain.

“This farm was my only means of survival,” the 52-year-old divorcee told Reuters, tears streaming down her cheeks. “I planned to pass it on to my children.”

Long the world’s undisputed cocoa powerhouses accounting for over 60 per cent of global supply, Ghana and its West African neighbour Ivory Coast are both facing catastrophic harvests this season.

Expectations of shortages of cocoa beans – the raw material for chocolate – have seen New York cocoa futures CCc2 more than double this year alone. They have hit fresh record highs almost daily in an unprecedented trend that shows little sign of abating.

More than 20 farmers, experts and industry insiders told Reuters that a perfect storm of rampant illegal gold mining, climate change, sector mismanagement, and rapidly spreading disease is to blame.

In its most sobering assessment to date, according to data compiled since 2018 and obtained exclusively by Reuters, Ghana’s cocoa marketing board Cocobod estimates that 590,000 hectares of plantations have been infected with swollen shoot, a virus that will ultimately kill them.

Ghana today has some 1.38 million hectares of land under cocoa cultivation, a figure Cocobod said includes infected trees that are still producing cocoa.

“Production is in long-term decline,” said Steve Wateridge, a cocoa expert with Tropical Research Services. “We wouldn’t get the lowest crop for 20 years in Ghana and lowest for eight years in Ivory Coast if we hadn’t reached a tipping point.”

It’s an imbroglio with no easy fixes that has shocked markets and could spell the beginning of the end of West Africa’s cocoa supremacy, the experts told Reuters. That may open the door for ascendant producers, particularly in Latin America.

And while millions of cocoa farmers in West Africa are facing a painful watershed moment, it’s a shift that will also be felt in wealthy consumer markets, possibly for years to come.

Shoppers buying Easter confectioneries in the United States are discovering that chocolate on store shelves is more than 10 per cent more expensive than a year ago, according to data from research firm NielsenIQ.

Since chocolate makers tend to hedge cocoa purchases months in advance, analysts say the disastrous crops in West Africa will only really hit consumers later this year.

“The kind of chocolate bar that we’re used to eating, that’s going to become a luxury,” said Tedd George, an Africa-focused commodities expert with Kleos Advisory. “It will be available, but it’s going to be twice as expensive.”

‘TRAUMATISED’
The roots of this season’s implosion are on full display in Samreboi, the community in Ghana’s western cocoa heartland where Gyamfi lives.

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Only three years ago, Samreboi boasted roughly 38,000 hectares of planted cocoa, according to Cocobod’s local office there. Today, it’s fallen to just 15,400.
Illegal miners began appearing in the area a few years ago, Gyamfi said.

She’d been resisting their threatening demands to sell them her plantation when, one day last June, she arrived to find it cordoned off. Armed guards blocked her entry.

Bulldozers tore out her cocoa trees. Miners swarmed the property. Within six months, the gold was finished and the site was abandoned, leaving Gyamfi with unusable land contaminated with toxic chemicals, a loan she can no longer pay back, and four children to support.

“I was traumatised,” she said.

She said she pleaded with the police and Cocobod but says she’s seen no reaction.

An officer at the local police station, who asked not to be identified, said they had received a complaint but he could not remember if they had sent officers to the farm. He declined to consult police records.

Cocobod spokesman Fiifi Boafo, upon learning of her case, said the board’s legal department would get involved.

“But we are not the police or the courts,” he said. “It is illegal to destroy cocoa trees, but the penalty isn’t punitive enough.”

Across Ghana, cocoa plantations are ceding ground to gold miners, known locally as galamsey.

Cocobod told Reuters it had no up to date data on the scale of the destruction. And while a study it conducted four years ago found that 20,000 hectares of cocoa had been lost to galamsey, five experts said mining has expanded rapidly in the intervening years.

“It’s now catastrophic,” said Godwin Kojo Ayenor, a development economist specialising in cocoa. “It’s covering almost every part of the cocoa belt.”

While some plantation takeovers are indeed violent, five farmers and community leaders told Reuters that more and more of them are becoming willing sellers.

To cocoa farmer Asiamah Yeboah, galamsey is just a symptom of a broader malaise. Since hitting peak production of over a million tonnes in the 2020/21 season, Ghana has been sliding. Output is forecast to plummet to just 580,000 tonnes this year.

Yeboah says he harvested 50 bags of cocoa in 2015, but production from his 15-hectare plot fell to just seven this season. He doesn’t earn enough to reinvest and increasingly struggles to find workers.

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