This was an urgent conversation to address the ongoing cocoa crisis where prices have plummeted and cocoa farmers, especially in Ghana and Cote d’Ivoire, have been most affected and unable to sell their stocks, which have had significant impacts on their livelihoods and lives.

We attempted at the causal factors of the crisis but also perused the differences in impact experienced by the Ghanaian cocoa farmers and Cote d’Ivoire cocoa farmers as lamentation in the public were mostly by the former.

In 2022, Cocoa price at the international market was $2,000. The price began seeing sharp rise with severe disease outbreaks –swollen shoot virus and black pod disease –that affected cocoa production and harvest. This was worsened by poor weather conditions (El-nino).

Cocoa requires moderate temperature for proper growth, and fermentation of seeds. Aging and low productive trees and production method added to these issues to constrain cocoa supply. This created scarcity for price rally –the largest cocoa global supply deficit in 60yrs.

With apprehension and speculations price reached $10,000 in early 2024 and exceeded $12,000 by April 2024, a record high of over 117% not seen in the last 50yrs. However, price hassince dropped 60% in past year to about $3,700 today. This while low is still above the $2,000 price at the onset of the rally.

Farmers that have stock when the prices were high and still have stocks today when price is $3,700 above 2022's $2,000 are still unable to get buyers for their commodities.

Africa produces 90% of the world’s cocoa, and Cote d’Ivoire and Ghana are the largest producers representing 70%of global productions. Thus, it can be seen how a dampened market would affect them.

Cote d’Ivoire produces the most cocoa with over 2 million tonnes and with Ghana coming 2nd with 860,000 tonnes.However, Ghanaian farmers complained most with the cocoa crisis. The host Toheeb Azeez asked Co-host Gbenga why this.

Gbenga explained it had to do with the different modes of financing where for Cote d’Ivoire the government buys the cocoa from the farmers but that of Ghana is paid for by international lenders and aggregators through collateralized purchase of future exports and fresh harvest. The international lenders provide syndicate loans mediated by the Ghana Cocoa Commodity Board (COCOBOD) and where the government stands in as surety.

The international lenders provide about $2 billion credit for Ghana cocoa farmers yearly. It enables and sustains production and creates a ready, stable market for the farmers.However, as the market plummeted the buyers refused to buy and where many have faulted the lenders for ceasing to buy, saying if prices had gone higher but the cocoa beans already collateralized and purchased at lower prices the agreement would still stand.

International buyers refused to buy Ghana’s cocoa to higher prices, with a normalized market where supply improved with the weather now favourable and countries as Cote d'Ivoire and Nigeria improving productions and retailing at lower prices. A speculative strategy led by COCOBOD's price hike, speculators exiting, strengthened currency making Ghana cocoa less attractive to buyers, etc. left the farmers in a bad shape. The board now has a total debt of GH₵ 31.9 billion.

We however called out that this does not justify price injustice to farmers. Farmers wailed despite price rally to highest peak for a year and half. The cocoa farmers realize less than a dollar a day. Ghanaian farmers consistently received lower than 40% of market value for cocoa during the global price surge.

We deliberated on the place for justice, equality and indigenous processing to trap in earnings, and a restructured market serving Africa and especially Nigeria, where Africa consumes $3.3 million tonnes of chocolate worth $16 billion and Nigeria $40 million chocolate. Also whether Ghana pulling out from international financing and reengineering local financing could work.