It is found in biscuits, candies, ice creams and cakes. It is the perfect treat for any time of the day, the most sought after edible indulgence in the world. It is chocolate. But now, the chocolate industry is in a meltdown. The price of cocoa beans, the most important raw material in chocolates, has skyrocketed, hitting a record $12,000 a tonnes in April, around four times last year’s price. Cocoa processors — who turn the beans into butter and liquor that are then converted to chocolate by companies — have thus reduced production because they cannot afford the beans. Behind the rising prices of cocoa is a combination of factors: El Niño, climate change, bean disease, and low income of cocoa farmers. We take a look El Niño and climate change are the culprits… The immediate reason for the ongoing crisis is the bad harvest season in West African countries Ghana and Ivory Coast, where 60% of the world’s cocoa beans come from. Due to the development of El Niño — a weather pattern, which refers to an abnormal warming of surface waters in the equatorial Pacific Ocean — in 2023, West Africa experienced heavier-than-usual rainfalls. This created an ideal ground for the spread of black pod disease, which causes cocoa pods (a case that holds a plant’s seeds) to rot on the branches of cocoa trees. The consequence is the drop in crop yield. The International Cocoa Organization has forecasted a global shortfall of about 374,000 tonnes for the 2023-2024 season compared to 74,000 tonnes last season, according to a report, published on March 28, by the UN Trade and Development. The scarcity has already led to an increase in the price of chocolate. Chocolate products at US retail stores grew 11.6% in 2023 compared to the previous year, according to market research firm Circana. Climate change is also a driving factor. With rising temperatures, rainfall in the region has become erratic — a problem for moisture-sensitive cocoa trees. Moreover, extreme weather events such as heat waves, droughts, and heavy rainfalls, have made these trees more vulnerable. The situation is slated to get worse. Earlier, when supply plummeted and prices went up, farmers used to plant more cocoa trees, which would bear fruits five years later and boost the supply. However, this is unlikely to happen now because of climate change, which could soon turn some cocoa-growing areas unusable, according to a report by The Atlantic. …But low income for the farmers is a bigger factor. The underlying issue is that the big chocolate companies do not pay enough to the cocoa farmers in West Africa. These farmers earn on average as little as less than $1.25 a day, which is well below the United Nations’ absolute poverty line of $2.15 per day. Take the example of farmers in Ghana. Up to 90% of them cannot afford enough food or other basics such as clothing, housing, and medical care, according to a 2023 report by Oxfam, which surveyed 400 farmers across the country. The net incomes of the surveyed farmers have fallen on average by 16% since 2020, with women’s incomes falling by nearly 22%. Nine out of ten farmers said they are worse off since the pandemic, the report said. Farmers are not able to invest in land to increase yield or build resilience against climate change due to the lack of funds. Planting new crops or taking care of their plans has also become unaffordable. Consequently, slave and child labour are rampant in cocoa farms and farmers are selling off their land to illegal gold miners. At the same time, the four biggest chocolate companies have made huge profits from chocolate sales. While Lindt, Mondelēz, and Nestlé together raked in nearly $4 billion last year, Hershey’s confectionery profits totalled $2 billion, according to the latest report, published last month, by Oxfam. Despite such financial gains, these companies have not done much to help raise farmers’ income. Dr Michael Odijie, a researcher of cocoa farming conditions in West Africa at University College London, told The Guardian that a historic focus on keeping consumer prices low had contributed to long-term exploitation. “Farmers are not earning a living wage, all because chocolate manufacturers desire to keep chocolate cheap for consumers. There is enough research to demonstrate that, in a way, chocolate is being subsidised by the children of West Africa,” he said. Experts believe that the prominent chocolate companies have the room to redistribute wealth down the supply chain. Unless they do that the scarcity of cocoa beans is likely to persist, leading to further exploitation of farmers and a rise in chocolate prices.
