Register For UPSC IAS New Batch

Cocoa Industry Impacted

For Latest Updates, Current Affairs & Knowledgeable Content.

COCOA INDUSTRY IMPACTED

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.

WHY?

The price of cocoa beans, the most important raw material in chocolates, has skyrocketed, hitting a record $12,000 a tonne 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.

FACTORS RESPONSIBLE FOR THE PRICE RISE

Behind the rising prices of cocoa is a combination of factors:

  • El Niño,
  • Climate change,
  • Bean disease, and
  • Low income of cocoa farmers.

WHAT IS THE IMPACT OF EL NINO?

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.

SHORTFALL IN PRODUCTIVITY = RISING COST

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.

Chocolate products at US retail stores grew 11.6% in 2023 compared to the previous year.

WHAT IS THE IMPACT OF CLIMATE CHANGE?

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.

LOW INCOME OF COCOA FARMERS

  • 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.
    • 90% of farmers in Ghana 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.

WHY BIG CHOCOLATE COMPANIES ARE NOT PASSING ON THE PROFIT TO FARMERS?

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.

WHY?

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.

 

Note: Connect with Vajirao & Reddy Institute to keep yourself updated with latest UPSC Current Affairs in English.

Note: We upload Current Affairs Except Sunday.

हिंदी में करेंट अफेयर्स पढ़ें

Any Doubts ? Connect With Us.

Join Our Channels

For Latest Updates & Daily Current Affairs

Related Links

Connect With US Socially

Request Callback

Fill out the form, and we will be in touch shortly.

Call Now Button