Contrary to the belief that China and Australia’s entry into cocoa production possesses a threat to West African growers, farmers in Africa’s biggest economy are optimistic that the break-in by both countries will be beneficial to them.
Better pricing for cocoa beans and access to cheaper processing machines to spur value addition in Nigeria are big wins the farmers see as the world’s second-largest economy joins the community of cocoa-producing nations.
“China now in the cocoa game is an opportunity for Africa and not a threat,” notes Dokun Thompson, the Oloni of Eti-Oni and chairman of the Eti-Oni Development Group.
“China is known for cheap technology and their entry means the African market will start seeing cheaper machines for grinding the raw beans,” Thompson, who is also the convener of the yearly Eko Chocolate show, states.
He says countries in the West African region still heavily rely on exporting raw beans as local processing, which offers the chance to build up revenues and create employment, is still very low owing to high operating cost of machines. This would soon be a thing of the past with China now in the game, he says.
More than 70 percent of the world’s cocoa beans are used for production by large chocolate producers in North America and Europe to make their sweet goods come from West Africa.
However, millions of smallholder farmers who depend on the crop for their livelihoods often have little or nothing to show for the cultivation of the commodity.
The low income earned by these farmers is a reflection of low international prices, which has forced Ghana and Ivory Coast to create a cartel and placed a minimum market price for their beans.
Cocoa farmers in Nigeria believe the low pricing era of the raw beans will soon be a thing of the past with the recent entrance of China and Australia into the production of the crop.
“China and Australia’s entry into the cocoa market is not a threat to Nigeria; instead it is a plus,” Robo Adhuze, chief operating officer, Centre for Cocoa Development Initiative, agrees.
“Cocoa prices are low because they are grown by poor countries, but with the entry of China a global power-house, and Australia, smallholder farmers will start seeing better pricing for their beans,” says Adhuze, who also owns a cocoa farm in Idanre – Ondo State.
The world’s second-largest economy entered into the global cocoa market last October when it exported 500kg of cocoa beans to Belgium from its island province of Hainan for the first time.
Mufutau Abolarinwa, national president, Cocoa Association of Nigeria, says the bold move by the likes of China and Australia is a wake-up call for the Nigerian government to transform the cultivation of the crop to generate more revenue amid acute FX shortages.
“China in the game is a wake-up call for the government to start taking cocoa production seriously, as it remains our top non-oil export earner,” Abolarinwa says from his Idanre farm in southwest Nigeria.
“China always ensures they come up top in whatever they set out to do and we should expect the same with cocoa,” he states.
It has been all talk and no action, maybe that would start changing if we want to be relevant in the cocoa business, he says.
He says each region of the world that cultivates cocoa has its uniqueness, adding that the African region is known for its unique aroma and volume.
Data from the International Cocoa Organisation (ICCO) show that the African region grinded only 21.6 percent of its total export for the first three months in 2021.
The monthly average price of a metric ton of cocoa has increased marginally from $2,358 in January to $2,462 in March, according to ICCO data.
SOURCE: BUSINESS DAY