|
|
|||||
This week, we look at what’s driving the crisis in the cacao industry, which provides the raw material for the world’s chocolate. Chocolate prices have soared recently, but the profits aren’t going to the farmers in West Africa. Plus, learn where chocolate – the word itself and the delightful product – originated. |
|||||
|
|
|||||
Top newsChocolate primer: Cacao is an annual cash crop grown by 6 million small farmers across Africa, Asia, and South America. It originated in Central America, where the Mayans and Aztecs cultivated cacao trees to produce a drink called “chocolatl,” from which the English word chocolate is derived. Today, however, the vast majority of cacao is grown in West Africa: Côte d’Ivoire and Ghana alone account for two-thirds of the world’s cacao supply. Cacao crisis: The cacao industry is in crisis: disease and extreme weather have decimated the last three crops. Unusually wet weather facilitated a surge in fungal and viral diseases that significantly curbed yields. One of those diseases, black pod rot, is caused by a fungus that attacks the cacao pods. The fungus is a cousin to the late blight responsible for the Irish Potato Famine, which wiped out three-fourths of Ireland’s potato crop between 1845 and 1852, killing 1 million people and pushing as many as 2 million more to migrate. Now farmers in West Africa are raising alarms that the rains have switched off and temperatures are soaring during what is supposed to be the cool rainy season. That could jeopardize the coming season’s harvest and further extend the crisis.
Bitter choconomics: As a result of dwindling supply, cocoa futures doubled this year. Last year, they increased by more than 60%. But farmers aren’t getting rich: instead, they’re feeling the pinch from lower yields and higher production costs. Cacao farmers earn just 6% of the final value of a chocolate bar. As a result, millions of these farmers earn less than $1 per day. The global chocolate industry is worth over US$100 billion annually. Côte d’Ivoire receives just 4% of that, despite producing roughly half of the world’s cacao. Manufacturing gold coins: So where is the money going? If you guessed corporations, you are correct. The Hershey Company’s net profit margins increased from 15.8% in 2022 to 16.7% in 2023. The profit margins of Mondelez International, which owns the Cadbury and Toblerone brands, jumped even more, from 8.6% to 13.8%. In the midst of the global cacao crisis, these chocolate makers appear to be following Winston Churchill’s advice to “never let a good crisis go to waste” and padding their bottom lines. Looks like disease and bad weather aren’t the only things to blame for higher chocolate prices. {slow clap} Earnings disparities (cont’d): To help struggling cacao farmers, Côte d’Ivoire President Alassane Ouattara reportedly approved a measure this week to increase the official cacao price by 50%, to 1,500 CFA francs ($2.47 per kg). It’s a welcome move that will enable farmers to realize some gains from recent global price spikes. But lower-income countries with already tight budgets shouldn’t be taking the squeeze so that multinational companies can increase profits. Côte d’Ivoire spends just 1% of its GDP on health, well below the recommended 5% minimum. Meanwhile, Mondelez International bragged about delivering “double-digit top-line and earnings growth for the year, leading to strong capital return to shareholders” whilst reporting an 83% increase in 2023 profits, to US$5 billion. Joining forces: Producer countries are pushing for chocolate companies to pay higher prices, with mixed success. In 2018, Côte d’Ivoire and Ghana formed the Côte d’Ivoire-Ghana Cocoa Initiative (CIGCI) to increase their leverage in negotiations. Cameroon and Nigeria, which produce a combined 15% of the world’s cacao, have asked to join. The CIGCI has implemented a program that places a US$400 per tonne premium on cacao sales. But some companies are buying on secondary exchanges, thereby avoiding paying the premium. 👀 Invisible women: Women do most of the work in the West African cacao industry, for a fraction of the profits. In Côte d’Ivoire, women do 70% of the work on cacao farms yet receive just 20% of the income. Only 25% of landowners in the country are women. That makes it difficult for women to receive training, access financing, and join cooperatives. Sadly, high levels of gender inequality are the norm across most of West Africa. Global gender inequality  Some good news: Help may be on the way for cacao farmers. Research in Côte d’Ivoire led to the development of a field-ready rapid detection kit that can quickly and accurately identify cocoa swollen shoot disease, a viral infection spread by mealybugs that accounts for 17% of the annual lost cocoa production. That can help farmers take quick action when the disease is spotted, potentially reducing its impact on yields. Promising new research is exploring the use of biological agents to mitigate diseases. And holistic farming practices focused on rebalancing soil nutrition, microbes, and species diversification have shown promising results in preventing disease, protecting the environment, and reducing farming costs. From the ONE Team
The numbers
 |
|||||
|
|
|||||
Quote of the week
|
|||||
|
|
|||||
What you should read, watch, and listen to:
|
|||||
|
|
|||||
A look ahead7 April: 30th Commemoration of the 1994 Rwandan Genocide, Addis Ababa, Ethiopia 7 April: World Health Day 9 - 12 April: 2024 Skoll World Forum, Oxford, UK |
|||||
|
|
|||||
The ONE Campaign’s data.one.org provides cutting edge data and analysis on the economic, political, and social changes impacting Africa. Check it out HERE. |
|||||
|
|
|||||
|
|
|||||
Did you like today's email?
Loved it 
Mehhh 
Hated it |
|||||
|
|
|||||
Did you like today's email?
Loved it
Mehhh
Hated it |
|||||
|
|
|||||
Wie hat dir dieser Newsletter gefallen?
Richtig gut!
Ging so…
Überhaupt nicht. |
|||||
|
|
|||||
|
|||||
|
|||||
|
|||||
|
This email was sent by ONE.ORG to test@example.com. You can unsubscribe at any time. ONE Campaign |
