A recent study found that disease outbreaks, ageing trees, and climate change are the main obstacles limiting cocoa production in Africa, where more than 70% of the commodity is farmed.
Ivory Coast and Ghana, the world’s main cocoa suppliers, have experienced several production disruptions due to unfavourable weather and aged trees, according to research by Afreximbank titled “Afreximbank Research Commodity Market Updates.”
According to the research, supply chain constraints have increased volatility and raised concerns about long-term production capacity. Logistical difficulties and changes in farmer incentives have made these bottlenecks worse.
“Forecasts point to a decline in Ghana’s cocoa yields over the long term, driven largely by ageing cocoa trees, with approximately one-quarter of the country’s 2 million cocoa hectares estimated to be over 40 years old,” it noted.
The report revealed that older trees have significantly lower yields, making replanting essential for sustaining production. However, it explained that the process of farm renewal is slow and costly and is compounding supply pressures in the market.
Also, many farmers often resist replanting due to the 5–10 years of lost earnings before trees reach full productivity.
Afreximbank noted that adverse weather conditions have partly fanned the relentless surge in cocoa prices. At the start of 2024, severe harmattan winds swept across West Africa, significantly reducing cocoa arrivals at ports in the two countries.
Owing to weather challenges and other factors, Ghana’s cocoa production fell 37 percent in the space of two years to 429,323 metric tons in the 2023/2024 season from 683,269 tons in the 2022/2023 season.
“The changing weather patterns continue to raise concern that the 2024/25 season could witness an earlier onset of Harmattan conditions, particularly in Côte d’Ivoire, potentially amplifying price volatility in an already bullish market,” the report revealed.
Similarly, Ghana’s rise in illegal gold mining contributes to its cocoa production shortfall. Due to what is referred to as galamsey — gather and sell — illegal miners encroach on cocoa farms in search of gold, further disrupting cultivation activities.
According to the report, this small-scale mining boom has encroached on cocoa farms, posing significant risks to cocoa production and the environment.
These disruptions drove global cocoa prices to record highs of over $12 million last year.
Looking ahead to the 2024/2025 season, the report noted that the future is looking bright for Cote d’Ivoire. In December 2024, cocoa arrivals were reported to have increased by 27.4 percent to 1.05 million tons in the ports.
While Ghana recorded a staggering 57 percent rise in graded and sealed beans to 366,075 tonnes by mid-December.
“The recent cocoa price rally has once again underscored the structural imbalance in the global cocoa market—despite Africa accounting for over
75 percent of global production, price discovery and trading remain predominantly concentrated in offshore exchanges, limiting producer influence over pricing mechanisms,” Afreximbank noted.
Source: Business Day
