Triple Hardships of Bad Weather, Policy Failures, and Pest Infestations
Abandonment of Cultivation in C?te d'Ivoire and Ghana
In the international futures market, the price of cocoa, the raw material for chocolate, has reached an all-time high, but some farmers in West Africa's cocoa-producing countries, C?te d'Ivoire and Ghana, are giving up cocoa cultivation. This is due to the triple hardships caused by worsening weather conditions, government support policy failures, and the spread of pests and diseases.
On the 8th (local time), the US Wall Street Journal (WSJ) reported on the plight of these African cocoa farmers. According to the WSJ, last month the price of cocoa on the New York futures market reached a record high of $12,565 per metric ton. The price of cocoa rose by 178% last year, surpassing Bitcoin's 122% surge.
The International Cocoa Organization (ICCO) announced that from September 2023 to September last year, cocoa production in C?te d'Ivoire decreased by 22% compared to the same period the previous year. Cocoa production in Ghana also declined by 27% during the same period.
Cocoa farmers are suffering from triple hardships including worsening weather, government support policy failures, and the spread of pests and diseases, with particular criticism directed at government policies such as the fixed price system. The original purpose of introducing the fixed price system was to protect farmers from unstable price fluctuations, but ironically, as prices soared, farmers did not benefit, and only the government, which pre-purchased cocoa, profited.
In the past, farmers in C?te d'Ivoire and Ghana cleared forests and planted cocoa trees to cultivate more cocoa, but the expansion of cocoa farms has been hindered by new European Union (EU) laws aimed at protecting the world's tropical rainforests.
Moreover, increasing production in existing farms by cutting down old, less productive trees and planting new ones incurs significant costs. Because of this, some farmers are abandoning cocoa cultivation altogether and switching to other crops or exploring new methods such as operating poultry farms, the WSJ reported.
Meanwhile, 'climateflation,' where food prices rise due to reduced agricultural production caused by climate change, is becoming a reality domestically as well. With the surge in cocoa prices, Orion raised the prices of 13 products by an average of 10.6% starting from the 1st of last month, with Choco Song-i and Bicho B prices increasing by as much as 20%. Haitai Confectionery also raised prices of 10 products, including Home Run Ball and Pocky, which have a high proportion of chocolate ingredients, by an average of 8.6% on the same day. Prior to this, Lotte Wellfood raised prices of 17 products, including Pepero and Ghana chocolate, by an average of 12% in June last year.
The price increase due to abnormal weather is not limited to cocoa. The price of palm oil, mainly used in the food and confectionery industries for snacks and ramen production, rose 21% compared to the average year, and Arabica coffee prices have also exceeded twice the average price. Olive oil prices have also soared due to drought in Spain, the world's largest producer.
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