Ghana’s position as the World’s second largest cocoa producer shaky as Ecuador’s cocoa production soars
The latest 2022 Cocoa Barometer report has revealed that Ecuador is likely to overtake Ghana to become the world’s second largest cocoa producer within the next ten to fifteen years. This comes at the backdrop of the continuous increase in cocoa production in Ecuador as against the recent decline in cocoa production in Ghana.
Rising Cocoa Production in Ecuador
In the past decade, Ecuador has been climbing the ranks in cocoa production and currently the third largest cocoa producer in the world, behind Ghana and Côte d’Ivoire. Cocoa production in the country has been on a positive trajectory making it the largest producer of the crop in Latin America. Data from the International Cocoa Organisation (ICCO) indicate that between the 2005/06 and 2021/22 seasons, cocoa production in the country has increased by 213%. The country recorded its highest production in the just ended 2021/22 season producing about 370,000 MT, a 1.4% increase year-on-year.
The consistent increase in cocoa production in Ecuador puts the country at close range to possibly overtake Ghana as the World’s second largest producer of cocoa in the near future. This is evident in the production trends of the two countries over the past decade. In the 2010/2011 season, Ghana produced 864,000 MT more than Ecuador after Ghana produced about 1,025,000 MT and Ecuador produced 161,000 MT (16% of Ghana’s output). In the 2017/18 season, production difference between the two countries reduced to 618,000 MT with Ghana producing 905,000 MT and Ecuador recording 287,000 MT. At the end of the 2021/22 season, Ghana produced 319,000 MT more than Ecuador, after its production fell to 689,000 MT and Ecuador’s cocoa output rose to 370,000 MT (54% of Ghana’s output).
Reforms driving change in Ecuador’s Cocoa sector
The performance of Ecuador’s cocoa sector has been as a result of deliberate sectoral reforms implemented since 2007. The introduction of the 2008 constitution provided a framework for the development of strategies and policies that sought to develop and transform the cocoa sector to reduce poverty among small-holder farmers. These led to reforms that encompass investments in infrastructure, advisory and extension services to farmers to ensure good agricultural practices, credit assistance programs for farmers, cultivation of higher yielding cocoa varieties such as the CCN-51, improving traceability, post-harvest management and promoting the organisation of farmers into cooperatives.
With significant improvements in cocoa production as result of these interventions, the government in 2018 introduced a new plan the Competitive Improvement Plan (PMC) which seeks to double cocoa production up to around 700,000 metric tonnes and also double exports of cocoa and its derivatives from US$760 million to US$1.5 billion by 2030. With public and private investment of US$600 million earmarked for the program, 12,000 new jobs are expected to be created in addition to the current 120,000 producers of the crop. The plan is also seeking to expand the production of Fine/Flavor Cocoa (FFC) varieties and processed cocoa products. At the end of 2030, Ecuador expects to increase cocoa plantations from 500,000 hectares to around 720,000 hectares.
Declining Cocoa Production in Ghana
In Ghana however, cocoa production has taken a downward slide after the country recorded a historic cocoa output of over a million metric tonnes in the 2020/21 season. Production at the end of the 2021/22 season is estimated at 689,000 MT, representing a 7% decline between 2005 and 2022, and a 34% decline year-on-year, which is the highest decline in annual output that the country has recorded over the past decades. The decline in cocoa output in the country contributed largely to the world supply deficit of 306,000 MT this year.
Several factors have accounted for the recent decline in cocoa output which include unfavourable weather conditions, prevalence of swollen shoot disease, the reduced use of fertilisers due to rising prices and most notably illegal mining activities.
The increase in illegal mining activities in major cocoa growing areas have had significant negative impact on cocoa production in the country and further threatens future cocoa output. Aside the chemical poisoning of cocoa beans due to the uncontrolled use of mercury and cyanide by small scale miners that find their way in water bodies used for irrigation purposes, many cocoa farms have also been destroyed as some farmers have sold their farms for mining purposes in return for relatively better income than what they receive from cocoa farming.
Ghana Cocoa Board (COCOBOD) reported that between 2019 and 2020, about 19,000 out of 20,000 hectares of cocoa lands surveyed across Ashanti, Western and Eastern regions were destroyed as a result of illegal mining activities. As illegal mining activities continue to persist, the country is likely to lose more cocoa farms. This is because many farmers currently deem cocoa farming to be economically unproductive and are therefore willing to sell their farmlands for mining purposes.
The recent increase in cocoa prices for the 2022/23 season by the government have also not helped matters as many farmers have expressed their dissatisfaction with the new increment. Cocoa farmers are now to receive GH¢12,800 per tonne and GH¢800 per 64kg bag. Some cocoa farmers have described it as insensitive to their economic woes in the midst of the increasing inflation, prices of inputs, fuel and economic hardship. According to them, this is likely to worsen cocoa production as many farmers would be more encouraged to sell their farms for mining activities.
Cocoa Production Outlook and Future Development
Ghana is set to record a further decline in cocoa production in the 2022/23 season. COCOBOD has projected an output of 650,000 MT after a downward review of the initial projection of 850,000 MT. Fertilizer shortages occasioned by the Russia-Ukraine war, drought and illegal mining activities have been identified as driving the change in 2023 projections.
In the midst of all these threats to future cocoa output in Ghana, there is yet to be a deliberate and clearly laid out comprehensive plan and policy direction by the government through COCOBOD to revamp and resuscitate the sector in a manner that would significantly and sustainably increase the country’s cocoa output, improve the livelihood of farmers, make cocoa farming attractive to the youth and enhance national economic growth.
In Ecuador however, there is every indication that the government has shown keen commitment in transforming the cocoa sector which has put them on track in their quest to become the world’s leading producer and exporter of the commodity if not the second largest producer in the next decade and beyond.
Until sound policy reforms are developed and effectively implemented, Ghana’s position as the world’s second producer of cocoa remain shaky in the near future.