"African Cocoa Harvest Might Improve But Your Chocolate Prices Won\u2019t"

" African Cocoa Harvest Might Improve But Your Chocolate Prices Won\u2019t \r\n Moussa Konate is an optimist who\u00a0tempers hope with caution after a season in which his cocoa crop was ravaged by disease. \r\n The outlook is brightening on his tiny Ivory Coast farm,\u00a0where\u00a0the October harvest is approaching fast. His trees are bearing abundant pods and the leaves are a healthy green. \r\n That happy state reflects\u00a0improvements across the West African cocoa belt that could help relieve\u00a0a\u00a0massive supply shortage which propelled\u00a0prices to record highs this year.\u00a0Alongside better weather, the 47-year old has finally received pesticides to help reduce the harm done by swollen shoot disease\u00a0and expects yields to be significantly higher than the single ton that he gathered last season. \r\n Yet issues that have long hobbled the industry remain far from fixed, meaning the price of beans that make chocolate isn\u2019t likely to decline back to the much lower levels that had previously prevailed. \r\n Swollen shoot is incurable, leaving farmers no option but to cut down sick trees, and training is scarce among Ivory\u2019s Coast\u2019s one million cocoa planters, the vast majority of whom are small-holders with limited resources. Konate\u2019s 3.5-hectare (8.6 acre) plantation, one of three plots that he cultivates with three wives and nine children, is littered with felled trunks. \r\n \u201cMany farmers do not know that to prevent the spread of the virus, one should not use the same machete that was used to cut down affected trees,\u201d\u00a0he said, speaking on his farm in the village of\u00a0Brazzaville, north of the port city of San Pedro. \r\n Such challenges\u00a0are likely to keep prices well above historic norms, even as a shift to La Nina promises better weather and some analysts expect global output to top demand for the first in four seasons.\u00a0Analysts at Fitch Solutions\u2019\u00a0BMI unit forecast rolling second-month cocoa futures in New York to average $7,000 a ton in 2024. Although that's down from eyewatering levels above $11,000 earlier this year, most-active futures had averaged less than $2,000 for decades and the December contract is currently trading above $7,000. \r\n \u201cWe are certainly not seeing the potential for a big surplus. There is still a lot that can happen in the next months,\u201d said Steve Wateridge at Tropical Research Services. The market will most likely be balanced and \u201cthat\u2019s not a good place to be in,\u201d he said. \r\n Lasting\u00a0issues facing the region\u2019s cocoa industry range\u00a0from crop disease to climate change.\u00a0\u00a0It takes at least three years for a cocoa tree to reach fruit-bearing maturity, constraining how quickly production can ramp up. Ghana and the Ivory Coast also\u00a0set farmgate prices in advance,\u00a0a long-standing practice\u00a0to protect growers\u00a0from lower-than-expected prices, which dulls the incentive to lift supply in response\u00a0to a booming market. \r\n Both nations have\u00a0made some adjustments. But\u00a0several farmers told Bloomberg that they still couldn\u2019t afford to buy\u00a0enough fertilizer\u00a0and pesticide, or hire more labor to help with pruning or hand pollination, which could help increase yields. \r\n Governments also thwart\u00a0foreign investment that could raise output. The status quo gives Ivory Coast and Ghana \u2014\u00a0the world\u2019s number one and two producers who contribute more than half of global supply \u2014\u00a0powerful leverage over the market and they aren\u2019t giving it up. \r\n That\u2019s why the expected recovery in West Africa\u2019s production will mostly be driven by better weather, as La Nina brings more favorable conditions\u00a0to the region later this year. In Ivory Coast, early pod counts showed output could rise about 10% from the prior season to 2 million tons, Bloomberg recently reported. \r\n But it\u2019s not guaranteed:\u00a0\u00a0Drier\u00a0weather reported in July and August has led to below-normal soil moisture and is limiting\u00a0crop growth, according to Brandon Fox, an operational meteorologist at Maxar Technologies Inc. \r\n In addition, farmers fear the spread of swollen shoot, a destructive viral infection that reduces the yield of infected trees by up to 70%, according to studies.\u00a0Ivory Coast and Ghana in particular are grappling with aging trees that are susceptible to diseases. \r\n \u201cDespite the many promising initiatives targeting this issue, substantial work remains to be done,\u201d said Mariette Verbruggen, vice president, corporate affairs at the World Cocoa Foundation, referring to the disease. \u201cThese initiatives are not necessarily coordinated and hence do not reach the scale necessary to achieve lasting impact.\u201d \r\n A significant part\u00a0of Ghana\u2019s Western North region \u2014 the country\u2019s cocoa hub \u2014 is infected with swollen shoot, according to a report from the International Cocoa Organization, citing\u00a0the local regulator. \r\n J\u00e9r\u00e9mie Kan Kouassi, director of agricultural development support at Le Conseil du Cafe-Cacao, Ivory Coast\u2019s industry regulator, said that around 200,000 hectares of cocoa plantations have been destroyed to stop the disease. That\u2019s a sliver\u00a0of the 3.5 million hectares the country has under cultivation. \r\n But Wateridge estimates that about a quarter of\u00a0farms are infected and other industry specialists agreed the problem is significant. \r\n \u201cThis is unfortunately probably the tip of the iceberg because you don\u2019t have the large scale testing for all non-symptomatic trees,\u201d said Sanja Fabrio, business development director at SwissDeCode, a company that develops testing tools for swollen shoot disease. \r\n The only known remedy requires cutting down infected trees and surrounding ones, but the difficulty remains persuading farmers of the need to destroy seemingly healthy stalks. \r\n Looming European deforestation regulations, which means farmers cannot simply chop down forests to start new plantations, complicate\u00a0attempts to move into uncontaminated areas. \r\n \u201cGood replanting helps offset the ravages of this virus,\u201d said Konan Kouakou, a 35-year old farmer in Gabiadji in Ivory Coast. \u201cIt is difficult to expand cocoa plantations, because of the classified and protected forests.\u201d \r\n Still, farmers in Cameroon and Nigeria\u00a0also expect to collect more pods in the 2024-25 season. And unlike their neighbours in Ivory Coast and Ghana, they benefited from the recent rally in prices earning above three times their counterparts. \r\n \u201cWe have never reached this price level before,\u201d\u00a0said Monda Bakoa, who sold beans from his farm at Ndom, southwest Cameroon for more than 6,000 CFA franc ($10) per kilo, six times the previous harvest. \u201cIf the trend were to continue into the main crop harvest, many farmers will effectively become rich.\u201d \r\n High prices are drawing many people into cocoa farming, according to Mufutau Abolarinwa, president of the Cocoa Association of Nigeria, who sees the 2024-25\u00a0harvest yielding 285,000 metric tons compared with 270,000 tons\u00a0in 2023-24. \r\n In contrast, farmers in Ghana and Ivory Coast earn between $2,100 and $2,500 a ton, less than a third of the terminal prices.\u00a0Several told Bloomberg that the farmgate prices need to\u00a0be raised to support\u00a0cocoa cultivation. \r\n Low pay has led frustrated farmers to sell their land for illegal gold mining, known in Ghana as galamsey, which does tremendous destruction through excavation and pollution. \r\n \u201cAfter destroying our land, the \u2018galamseyers\u2019 tend to hijack our farmhands too, so how do Ghanaian cocoa farmers with an average age of about 60 years manage?\u201d asked Johnson Mensah, a chief farmer who supervises over 150,000 other growers in Enchi, Ghana. \u201cUntil galamsey\u00a0is stopped Ghana\u2019s cocoa doesn\u2019t have a future.\u201d \r\n While he also sees illegal mining as a threat, it doesn\u2019t dim the mood of Ebenezer Agyarko, who hums as he clears weeds on his 12.5 acre plantation near Kwabeng, north of Accra, the capital. \r\n Smiling as he points out the pod-laden\u00a0trees on his farm, he expects a fivefold increase in yields compared with the last crop which was stunted by bad weather, disease and a lack of pesticides. \r\n \u201cI only pray that the weather stays the same so I can harvest all these\u00a0beans and sell them at a much higher price to help me pay all my outstanding bills.\u201d "

"African Cocoa Harvest Might Improve But Your Chocolate Prices Won\u2019t"

Wall Street Warns of Nuclear Tech BubbleAMP

Bank of America Recommends Resources Stocks to Bet on AIAMP

Naira is Overvalued by 30% Against the DollarAMP

AI Startups Dominate Global VC Funding in 2025 with $192.7 BillionAMP

U-20 World Cup: Italy, Mexico, and Spain Secure Knockout Spots as Australia Keeps Hope AliveAMP

Premier League: Liverpool’s Struggles Continue After Defeat to Chelsea; Arsenal win to Climb topAMP

Ghana Premier League Matchday 4 PreviewAMP

IMF Announces Appointment of Dan Katz as First Deputy Managing DirectorAMP

Kenyan Man Indicted in U.S. Over $650m USAID-Funded Health Supplies ScandalAMP

Wall Street Warns of Nuclear Tech BubbleAMP

Bank of America Recommends Resources Stocks to Bet on AIAMP

Naira is Overvalued by 30% Against the DollarAMP

AI Startups Dominate Global VC Funding in 2025 with $192.7 BillionAMP

U-20 World Cup: Italy, Mexico, and Spain Secure Knockout Spots as Australia Keeps Hope AliveAMP