observations of nations: côte d’ivoire | observation by a reporter: the awakening of côte d’ivoire, the “kingdom of cocoa”
2024-09-04
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xinhua news agency, abidjan, september 3 (reporter zhang jian, zhang yujie) in the past one or two years of commodity price increases, cocoa futures prices have soared, exceeding the increase in gold. however, the cocoa price increase is only a game for investment market players. it is not only consumers who lament, but also raw material producing areas that have not received much dividends, such as cote d'ivoire, the world's largest cocoa exporter.
this is a corner of the market photographed in the village of blaye in ogudou, divo province, cote d'ivoire on january 8. photo by xinhua news agency reporter han xuin fact, the west african country of côte d'ivoire realized many years ago that only by further changing its single economic structure can it avoid being controlled by others. in recent years, the country has stepped up its exploration of transformation and upgrading around the cocoa industry in order to gain greater voice and more economic benefits in the international market.
cocoa prices rise faster than gold
in the marcory district of abidjan, the economic capital of côte d'ivoire, the streets are always filled with the rich aroma of cocoa, whether in the early morning or in the afternoon. the aroma of roasted cocoa beans wafts from the processing plant, refreshing the heart.
on november 15, 2021, a farmer showed dried cocoa beans at a cocoa plantation in eastern province, ghana. photo by xinhua news agency reporter xu zhengcocoa beans are the core raw material for making chocolate. côte d'ivoire ranks first in the world in cocoa production, and its neighbor ghana ranks second, but only one-third of côte d'ivoire's production. nearly two-thirds of the world's cocoa production comes from these two west african countries.
like many other commodities, cocoa prices experienced a crazy surge earlier this year. expectations of continued low production stimulated capital market speculation on cocoa prices. on march 26, the price of new york cocoa futures per ton hit the $10,000 mark for the first time, a record high since 1977. from march last year to march this year, the cumulative increase in new york cocoa futures prices was as high as 250%, far exceeding the increase in gold prices during the same period.
the rise in cocoa prices is mainly related to the reduction in cocoa bean production. due to climate change, aging trees, pests and diseases, ivory coast and ghana have had poor cocoa bean harvests for three consecutive years. ehola yao, chairman of the indegne-joiebrun agricultural production cooperative, told reporters that abnormally high temperatures have caused local cocoa production to drop from 95,000 tons in previous years to 70,000 tons.
the ivorian government usually sets the cocoa purchase price on the eve of the main harvest season in october each year. since the beginning of this year, due to the rapid rise in cocoa futures prices, the ivorian ministry of agriculture announced in april that it would increase the cocoa purchase price from 1,000 cfa francs (about 1.7 us dollars) per kilogram to 1,500 cfa francs (about 2.5 us dollars). minister of agriculture kobena kwasi adjumani said that this is the cocoa purchase price that the country has never reached before, and it is also the first time that the mid-season price is higher than the main season price.
although the price increase is large, it is still a bargain compared to chocolate prices. chocolate has a serious premium, and the cost of cocoa beans only accounts for a small part of its total cost. among the approximately 29 million people in côte d'ivoire, more than 1 million people grow cocoa, and nearly 6 million people rely on the cocoa industry for their livelihoods.
the “bad consequences” of western rules of the game
except for cote d'ivoire and ghana, which adopt a fixed price for cocoa purchases throughout the season, most other cocoa producing countries adopt free trade. therefore, in this round of price increases, cocoa prices in other producing areas around the world have soared, and black markets for purchasing and smuggling cocoa have also emerged in cote d'ivoire and ghana.
visitors buy chocolate at the "belgian chocolate village" in brussels, belgium, on june 9, 2022. photo by xinhua news agency reporter zheng huansongin fact, ivory coast has paid a heavy economic price for freely trading cocoa. therefore, the government has changed to setting the purchase price for the current season after estimating the medium- and long-term market conditions to avoid the international market shorting cocoa and directly "hurting farmers".
looking back at history, during the colonial period, côte d'ivoire planted a large amount of cocoa to satisfy the economic interests of the "suzerain country". after independence in 1960, the country's economy once developed rapidly due to high international agricultural product prices. however, in the 1980s, international agricultural product prices fell, and côte d'ivoire suffered a drought, which severely hit the country's economy.
to this day, cocoa exports remain an important source of foreign exchange for côte d'ivoire. nearly half of the country's cocoa beans are exported in raw form, and the remaining half are exported in semi-processed form. in 2023, the export value of cocoa beans and their processed products accounted for 31.6% of the country's total exports. in today's complex and changing international environment, this relatively single export-oriented economy is more difficult to withstand the impact of multiple storms such as market supply and demand and exchange rate fluctuations, which is not conducive to the healthy development of the economy and people's livelihood.
chocolates photographed at the chocolate salon in paris, france on october 31, 2022. photo by xinhua news agency reporter gao jingxu xiangping, president of the hunan china-africa economic and trade cooperation promotion research association, said that most of côte d'ivoire's cocoa is exported to europe and the united states, and the industry standards of the cocoa industry are also in the hands of westerners. therefore, for a long time, this major producing country that lacks industry voice has found it difficult to profit from it.
at present, europe and the united states still occupy a monopoly position in the chocolate and other food processing industries downstream of the cocoa industry chain, and the cocoa industry standards are mainly formulated by the cocoa trade association in london, uk and the american cocoa merchants association in new york, usa.
"cocoa kingdom" quality upgrade
over the years, many countries in the "global south" have been severely exploited due to the price gap between imported industrial products and exported raw materials. côte d'ivoire has long been aware of the problem and has started planning and taking a series of measures several years ago to seek to enhance its role and status in the cocoa industry.
as part of the abidjan declaration signed in march 2018, côte d'ivoire and ghana joined forces to develop a bilateral cooperation framework in the cocoa sector with the aim of correcting market failures so that the market price of cocoa reflects the social value of the product and ensures decent remuneration and better working conditions for producers.
on may 11, 2021, a farmer dried cocoa beans at a cocoa plantation in eastern province, ghana. photo by xinhua news agency (photo by sai te)the ivory coast coffee and cocoa committee will also reform its purchasing methods during the harvest season in october this year. by issuing one million farmer certification cards with payment functions and traceability information, it will ensure that cooperatives become the only middlemen from farmers to exporters for cocoa beans, allowing farmers to receive direct rewards and avoiding informal intermediaries from earning the difference by lowering prices, hoarding goods, etc.
at the same time, the ivorian government has been encouraging the local development of the cocoa processing industry and supporting investment in factory construction. in the pk24 industrial park in the northwest of abidjan, the cocoa processing plant and cocoa bean warehouse, which is contracted by china light industry nanning design engineering co., ltd., are about to be completed. after completion, the project will become the largest self-owned cocoa processing plant in côte d'ivoire, which can convert cocoa beans into finished products such as cocoa butter and cocoa powder.
the ivorian government has high hopes for the cocoa processing industry, hoping that by 2030, 100% of the country's cocoa beans will be processed locally. solange amiciah, head of the ivorian investment promotion center, said that the government plans to promote ivory coast to a middle-income country by developing the agricultural product processing industry. to achieve this goal, ivory coast needs to continue to make breakthroughs in improving the level of processing technology for various agricultural products and attracting foreign investment.
