The last two weeks have seen a hype in medialand around expected shortages of cocoa in the future. Bloomberg has even called it “The World’s Most Endangered Treat”.

But before you rush to the stores and hamster all the chocolate you can, a little nuance from someone whose business it is to know these things. (As coordinator of a network of NGO’s and trade unions in sustainable cocoa, and as the co-writer of some of the benchmark publications in the cocoa sector, I do believe I know a little bit about the topic).

Is cocoa production threatened? Yes, it is. But the problem isn’t Ebola, or an increase in demand from China. The problem is poverty. But first, let’s look at the reasons that were discussed in the media hype articles.

Ebola
The tragedy of Ebola is horrific. You’ve all seen pictures by now of how big Africa is, and how far most of Africa is from the Ebola region. Cocoa-production is very close to the Ebola outbreak. However, currently it looks as if Côte d’Ivôire and Ghana (the two largest producers of cocoa in the world) are going to be able to avoid the outbreak. Credit where credit is due: this is most likely because their governments acted quickly, resolutely and properly to the potential threat. The coming weeks remain crucial, as it’s peak cocoa-harvest time, usually a time when there is a lot of cross-border migration for labour. Up till now, I’ve not received any indication that Ebola has made the crossing. This is very good news, especially on a humanitarian level, but also on a chocolate-lover level.

This will also mean that the price of cocoa will probably go down on the global market in the coming weeks, due to a combination of reduced Ebola threat and increased supply because it’s harvest season. At the same time, a lot of the world’s chocolate this year has been ‘secured’ throught futures markets and hedging. Cocoa traders use speculation to protect themselves against rapid price increases, and they did so as soon as Ebola started to look like a threat.

Antonie Fountain
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China
A second reason that was discussed in the hype articles, was the increased demand in upcoming markets (such as China, India and Brazil). As we’ve written in a previous Cocoa Barometer (pages 6-8), I’m not convinced that this increase will be a very significant one, at least not for the medium term. The ICCO (the UN body responsible for cocoa and cocoa-statistics) has just issued a statement stating that in the last ten years, half of these years have seen a production surplus. So to all extents and purposes, we’re not running out of cocoa anytime soon.

Poverty
But is there a problem? Yes, there definitely is. In West Africa, the average age of a cocoa farmer is only a few years below the life expectancy of a cocoa farmer. Younger generations do not want to be cocoa farmers, because it’s a horrible job to have. You have to work hard, and there is virtually no money in it at all. Prices for cocoa are well below the 150 year average. Farmers are - simply put - in destitute poverty. There is no future in cocoa for them, and so their children are leaving cocoa, and often leaving the farms alltogether, moving to the cities. Unless cocoa becomes an attractive business proposition again, this trend will continue. Part of this solution must be an increase of the cocoa price that farmers recieve.

Supply solutions
At the same time, cocoa trees are getting older - and therefore less productive. Most farmers are also growing cocoa the same way they always have, and as a result their yield per hectare is also very low. Also, climate change, deforestation, and soil degradation are decreasing the amount of arable land suitable for cocoa production.

Many companies have started programs on training farmers, improving agricultural practices, and rejuvenating the population of cocoa trees. Most of the sustainability programs that you will see, will be focused on this. Which is solving *our* problem of enough chocolate for the future, but not necessarily the problem of the farmer: enough income. Most research we see, shows that increasing your yield is expensive, and requires a lot of labour. It is unclear whether this higher yield actually brings in higher income for cocoa farmers.

So yes, there is a problem. The problem is poverty. As a result younger generations aren’t growing cocoa anymore. Unless we make cocoa an attractive business for farmers, cocoa is going to become scarce.

But that’s not really a problem. Because then the price will go up. And cocoa will become attractive, benefitting the farmers. The biggest problem is that you and I are not paying a decent price for our chocolate. If we would - and if the farmer would get a good part of that increased price - this problem would solve itself quite quickly!

Dit artikel verscheen in het Engels onder de titel "The Great Chocolate Scare" op het blog van Antonie Fountain.

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