CHINA’S COCOA EXPORT: COCOBOD, MOFA ASSESS IMPACT
The Ghana Cocoa Board (COCOBOD) is assessing the potential impact of the export of cocoa beans by China on the local cocoa industry.
Relatedly, the Ministry of Food and Agriculture (MoFA) has intimated that China’s entry into the production and export of cocoa beans must not in any way hurt Ghana’s industry.
The two entities were sharing their thoughts on the potential impact of China’s export of cocoa beans to the global market.
The Chinese Academy of Tropical Agricultural Sciences (CATAS) recently reported that South China’s island province of Hainan had exported cocoa beans to Belgium for the first time.
The China Daily newspaper quoted Hao Zhaoyun, a researcher with CATAS. as saying: “The first batch of 500kg of cocoa beans, worth $3,600, was produced in Xinglong, a township of Hainan with a tropical climate.”
Although China currently does not appear in the 45 top cocoa-producing countries in the world, many experts have opined that its full entry into the cocoa export space is a potential threat to the fortunes of the two biggest cocoa-producing countries, Cote d’Ivoire and Ghana.
Their apprehension is bolstered by the application of technology in cocoa production in China.
Put together, Ghana and Cote d’Ivoire produce about 60 per cent of the world’s cocoa beans.
In the 2020 cocoa season, 4.8 million metric tonnes of cocoa was produced worldwide, with Côte d’Ivoire, the world’s biggest producer, accounting for 2,034,000 tonnes, while Ghana, the second-biggest producer, did 883,652, with Indonesia, the third-largest producer, making 659,776 tonnes.
Although COCOBOD expressed concern about the development, it nevertheless said it was too early for the country to panic.
“We are concerned, but it is too early for anyone to start panicking because if you look at the quantity of cocoa that has been exported by China, it is quite small and less than one tonne.
“We are concerned due to the fact that if production is increasing at a time when consumption in the world is not increasing, then obviously it will have an effect on the price,” the Senior Public Relations Officer (PRO) of COCOBOD, Mr Fiifi Boafo, told the Daily Graphic in an interview on the sidelines of a meeting between COCOBOD and some local cocoa processing companies in the country in Accra yesterday.
Use of technology
Mr Boafo said it was necessary to assess what exactly China was doing in order to determine whether it was a major threat or not.
“It has been proven scientifically that in order to grow cocoa in commercial quantities, the land has to be between 10 degrees north and 10 degrees south of the Equator, with the climate ranging between 18 and 32 degrees celsius and annual rainfall of about 1,500mm and 2,000 mm.
“So if you consider China, it does not have that weather pattern, which means it requires some technology to do so,” he said.
“The questions we should ask ourselves are: how much will that technology cost China? And if you look at the world market price of cocoa, will the employment of that technology be able to produce cocoa at a commercial level and break even and make profit?”
He said while China had proved that it had the capacity to create things that had not been in existence and to bring out initiatives, as things stood now, there was no need to panic.
MoFA plays down fears
Speaking to the Daily Graphic in Accra yesterday, the Minister of Food and Agriculture, Dr Owusu Afriyie Akoto, said Ghana is not only the second-largest producer of cocoa beans in the world but also produces the best premium cocoa beans, which is the envy of other countries.
He said the extraordinary cocoa liquor flavour of Ghana’s cocoa beans made the beans the first choice consumers and processors craved for.
“You cannot substitute the flavour of our cocoa with any cocoa anywhere in the world. This the country is not ready to surrender to any country,” he stated.
Dr Akoto said China’s current production was very minimal and posed no threat to Ghana, adding that even if the entire Hainan province produced cocoa, it would not come as a threat to Ghana.
“It’s a little island and so if they use the whole island to produce, it cannot meet our production,” he said.
Another advantage for Ghana, he said, was China’s growing taste for cocoa products.
The Asian giant’s chocolate consumption, which used to be very low, has seen systematic growth in recent years.
In Dr Akoto’s view, Ghana could capitalise on the increasing demand for cocoa products by the Chinese to increase cocoa exports to that country.
In 2019, Ghana’s exports of cocoa and cocoa preparations to China amounted to $128.71 million, according to the United Nations International Trade Statistics Database.
Adding value to cocoa
Earlier, speaking at the meeting with the cocoa processors, the Chief Executive Officer of COCOBOD, Mr Joseph Boahen Aidoo, had said Ghana was earning less than six per cent of the entire cocoa value chain of about $110 billion.
That was because the country still exported majority of its cocoa beans in the raw state, he said.
With the entire value chain expected to increase to about $140 billion by 2024, he said, Ghana could not continue to export cocoa in its raw form and, therefore, urged the local processors to make it a point to process all the cocoa beans produced in the country.
The Managing Director of the Cocoa Processing Company (CPC), Nana Agyenim Boateng, for his part, urged players in the industry to leverage the African Continental Free Trade Area (AfCFTA) agreement to promote cocoa consumption in the region.