Cocoa harvests collapse, prices skyrocket: Do we need an alternative to chocolate? | DW News

Key Concepts

Cocoa price surge, West Africa production collapse, cocoa swollen shoot disease, unsustainable cocoa farming practices (monoculture, full-sun systems), climate change impact, farmer exploitation (low wages, child labor), Ecuador's cocoa model, cocoa alternatives (sunflower seed-based), sustainable farming practices, fair wages.

Cocoa Industry Crisis: Price Surge and Production Collapse

The cocoa industry is facing a crisis due to a dramatic surge in cocoa prices, reaching over $10,000 per metric ton. This price increase is primarily driven by a collapse in cocoa production in West Africa, specifically Ghana and Ivory Coast, where production fell by 22% and 27% respectively last year. Jonathan Parkman, head of the cocoa section at commodity broker Marx in London, attributes this to production running well below global demand.

Factors Contributing to the Crisis

• Cocoa Swollen Shoot Disease: A significant factor in the production decline in Ivory Coast and Ghana.
• Unsustainable Farming Practices: Sophia Cordinudo, a geographer from the University of Victoria Canada, highlights the unsustainable expansion of cocoa production, including deforestation (90% of West Africa's cocoa grown on cleared rainforest) and monoculture farming.
• Full-Sun Systems: The use of sun-tolerant cocoa tree varieties, while initially productive, leads to soil degradation due to the heavy reliance on chemical fertilizers and pesticides.
• Climate Change: Nestle's annual report identifies human-induced climate change as a threat to crop yields, particularly in Brazil.

Impact on Industry and Consumers

• Reduced Profit Margins: Companies like Nestle are experiencing reduced profit margins due to high cocoa prices.
• Price Increases for Consumers: Consumers are facing higher chocolate prices, either through smaller product sizes for the same price or the use of cheaper substitutes like palm oil.
• Unequal Distribution of Profits: While cocoa prices rise, farmers receive a small fraction of the final price (average of €6 cents per bar), with supermarkets, manufacturers, and the processing industry taking the largest share.

Exploitation of Cocoa Farmers

• Low Wages and Child Labor: Impoverished farmers lack the resources to invest in sustainable farming methods, leading to continued low yields and perpetuating cycles of poverty. Low wages and child labor are common.
• Fixed Government Prices: In Ivory Coast and Ghana, farmers receive a fixed government price per kilo of cocoa, limiting their ability to benefit from market fluctuations.

The Ecuador Model

• Free Market and Production Cooperatives: In Ecuador, the world's third-largest cocoa producer, farmers sell freely on the market or through production cooperatives.
• Higher Farmer Income: The recent price rally has significantly benefited Ecuadorian farmers, who are now paid $400 per 100 kilograms.
• Efficient and Resilient Cultivation: Ecuador has more efficient and resilient cultivation methods compared to West Africa, leading to higher productivity per hectare.
• Deforestation Concerns: Despite its advantages, Ecuador also faces deforestation issues due to cocoa farming.

Cocoa Alternatives: Planet A Foods

• Sunflower Seed-Based Chocolate: Planet A Foods, a German company, has developed a cocoa alternative using sunflower seeds.
• Sustainable and Cost-Effective: This alternative aims to be more sustainable, avoid supply chain issues, and offer price stability compared to cocoa. Sunflower seed prices are more stable and predictable than cocoa prices. The company claims their alternative is three times cheaper than cocoa at the moment.
• Identical Processing: The alternative powder is processed using the same methods as real chocolate, allowing manufacturers to easily switch ingredients.
• Reduced CO2 Emissions: Sunflower Coco produces 80% less CO2.
• Market Expansion: Planet A Foods is expanding production and plans to enter the US market in 2025.

Conclusion

The cocoa industry is in a vulnerable position due to production collapses, unsustainable farming practices, and climate change. While cocoa alternatives like Planet A Foods offer a potential solution, they are not expected to replace cocoa entirely in the short term. The key to a sustainable future for the cocoa industry lies in fair wages for farmers, more efficient and sustainable farming methods, adaptation to climate change, and increased investment in the sector. Incentivizing farmers to use more inputs and increase yields will benefit both farmers and consumers. The Ecuador model demonstrates the potential for a more equitable and profitable system for cocoa farmers.