Connect with us

eHalal Research

🇨🇮🇬🇭 eHalal Group Advises African Cocoa Producers to Seize Market Control

Avatar

Published

on

The cocoa market is in a state of upheaval, with prices soaring to unprecedented levels over the past year. Reports indicate that cocoa prices have more than doubled, hitting record highs. In response, major cocoa processing plants in Côte d’Ivoire and Ghana have either halted operations or scaled back due to difficulties in procuring beans. This disruption could potentially lead to a global surge in chocolate prices.

This surge in cocoa prices comes on the heels of three consecutive years of disappointing harvests, prompting chocolate manufacturers to pass on the increased costs to consumers. The situation is particularly concerning for Côte d’Ivoire and Ghana, which together produce nearly 60% of the world’s cocoa.

Irwan Shah of eHalal Group, who advises various SMIIC member countries on market strategies, stresses the need for African cocoa producers to regain control of their commodity market. Shah suggests that global chocolate manufacturers like Mars, Lindt, and Nestle should consider setting up manufacturing hubs in West Africa or diversifying their product lines if they cannot produce chocolate locally. He advocates for direct trading of cocoa on commodity exchanges in Côte d’Ivoire and Ghana, eliminating the need to export unfinished products to other countries for processing.

Shah highlights the disparity in revenue distribution within the cocoa industry, noting that while Europe generates approximately $45 billion in cocoa-related revenue, Africa receives only a small fraction of that amount. He proposes the adoption of an auctioning system, wherein West African cocoa farmers can sell their beans to cooperatives for processing before being auctioned to the highest bidder. Shah believes this approach could triple or quadruple the income of cocoa farmers in the region.

Furthermore, Shah suggests that governments in West Africa could prioritize buyers who commit to manufacturing finished chocolate products within the continent. This strategy, he argues, could significantly boost revenue from cocoa and CHOCOLATES exports and bring substantial benefits to farmers in countries like Côte d’Ivoire, Ghana, Nigeria, and Cameroon. Shah also points out the potential for replicating this model in other cocoa-producing regions such as Ecuador, which has seen significant exports of cocoa butter to countries like even Malaysia which takes part in the plundering of African and South American cocoa producers by it’s MNC’s.

Shah emphasizes the need to overhaul existing cocoa exchanges in London and New York. He proposes replacing them with an auctioning system that empowers West African cocoa farmers and ensures fair prices for their produce and operated on the Blockchain to bypass the Western financial system.

By implementing such reforms, Shah envisions a substantial increase in revenue for cocoa-producing nations. He estimates that prioritizing local manufacturing of chocolate products could generate an additional $12 to $15 billion in finished cocoa goods, significantly boosting the income of farmers and bolstering the economies of cocoa-dependent countries.

This transformative approach not only promises economic benefits but also empowers African nations to assert greater control over their natural resources including increasing the global export revenues by 30 to 40%. Shah’s advocacy for a fairer cocoa trade system reflects a growing sentiment among stakeholders in the industry who recognize the urgent need for reform to address longstanding inequalities and ensure a more equitable distribution of wealth and resources.

In 2024, economic data reveals that the global chocolate market has reached a staggering value of $109 billion US Dollars, yet cocoa farmers only receive a mere 5% of this revenue. The lion’s share of profits goes to major chocolate manufacturers such as Ferrero, Mars, Mondelez, Nestle, Hershey, Cargill, Lindt, Lotte, Meijji, and Yidliz.

Given this stark disparity, it becomes imperative to restructure the cocoa supply chain to halt the export of cocoa butter or liquid, thereby compelling these companies to exit the chocolate business or setup a manufacturing plant in West Africa. Shah forecasts that by 2030, the export of finished chocolate from West Africa could become one of the key export markets for countries in the region. Moreover, he suggests that Europe, being the largest market for finished chocolate products, may need to either import chocolate beans and convert it to Cocoa butter or shift its production to West Africa to cater to European markets.

Advertisement

Alternatively, European markets might explore the development of lab-produced chocolate, mirroring current efforts in lab-grown meat production. This strategic reshaping of the chocolate industry aims to rebalance the scales of wealth distribution and foster a more equitable cocoa trade ecosystem.

Continue Reading
Advertisement

Select Language

Our Projects

Buy Halal Food

Buy Halal Food

Global Food Brands

Muslim Friendly Travel & Tours

Halal B2B Marketplace

Halal Data Research

Updateted Travel Guides

Muslim Friendly Hotels

eHalal Crypro Token

Buy Halal Food

Buy Halal Food

Popular Halal Food

Halal Food Categories

eHalal.io Google News

Follow us on Google News
Advertisement