Reuters Econ World
Cocoa
Dec 11, 2024
Joe Bavier, Reuters Africa business correspondent based in Johannesburg, shares his extensive insights on the cocoa market. He highlights the challenges faced by cocoa farmers in West Africa, including climate change and illegal mining. The discussion delves into how these factors lead to rising prices while farmers struggle in poverty. Bavier also explores the dynamics of cocoa production, contrasting West African smallholders with Latin American plantations, and the evolving market trends impacting futures pricing.
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Quick takeaways
- Severe challenges in cocoa production due to erratic weather and illegal mining activities have plummeted stock levels to historic lows.
- Emerging cocoa producers in Brazil and Ecuador are adopting sustainable practices and mechanization, potentially reshaping global cocoa supply dynamics.
Deep dives
Challenges in Cocoa Production
Cocoa production has faced severe challenges in recent years, particularly in the Ivory Coast and Ghana, which collectively account for about two-thirds of the world's supply. Erratic weather patterns and climate change have exacerbated these issues, leading to significant declines in crop yields. Furthermore, illegal mining activities in Ghana have compounded the problem, as cocoa farmers are often unable to protect their land. These factors have resulted in stock levels plummeting to their lowest since the 1960s, creating a perfect storm for the cocoa market's instability.
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