A cocoa market boom has been a mixed blessing for farmers in West Africa, where much of the chocolate ingredient is grown.
Heavy rains and crop diseases have taken their toll on harvests, pushing cocoa futures traded in New York to the highest level in almost five decades last month.
While farmers in Cameroon can charge more for the cocoa they do produce, they’re being targeted by criminals looking to cash in on the jump in prices. The theft of pods has surged and unlicensed traders have entered the market, using faulty scales to cheat growers, according to officials.
In Nigeria, cocoa farmers complain that some landlords have pushed up their rents, with some looking to quadruple their price.
“My landowner is asking for 450,000 naira ($561) per year on the 2-hectare farm for which I currently pay 200,000,” said Attangba Bonjo, who grows cocoa in Ikom in southeastern Nigeria. “Cocoa farmgate prices have risen to about 4 million naira from 2.7 million naira per ton in the last two months, which I believe the land owners want to have a taste of.”
About 60% of the world’s cocoa is grown in Ivory Coast and Ghana, where industry regulators set the price at which traders buy from growers. But in Cameroon and Nigeria — the world’s fourth- and fifth-largest producers respectively — there is a free-market system with minimal state intervention.
The market turbulence and the surge in criminality that’s accompanied it is perturbing the authorities in Cameroon, and tighter regulation is on the cards.
The sale of all cocoa on the market that can’t be traced will be banned, which should help stem theft, according to Trade Minister Luc Magloire Mbarga Atangana.
Chocolate lovers need better harvests to help tame prices, and ensuring African farmers suitably benefit from their crops will be key to safeguarding future supplies.
Source: bloomberg.com