The recent fall in the price of cocoa from Cameroon has
some farmers and exporters alarmed. Officials say the drop is not linked to the global economic
recession. But they warn that a prolonged downturn could lead to a drop in
demand for exports from the continent.
Voice of America English to Africa Service’s Ntaryike Divine, Jr., in
Douala, Cameroon, reports the Cameroon Cocoa and Coffee Board says recent drops in cocoa prices
are not linked to the current global financial crisis.
The managing director of
the board, Michael Ndoping, says the price slump is due to a glut of cocoa on
the international market. He says the board won’t know until early next year if the current price
plunge means the worldwide recession is reducing demand for African cash crop
exports. He adds that recent cocoa
prices have been dropping compared to the week before.
“This is due to the fact that this is the peak period when all
producing countries are all exporting – so there’s surplus supply as opposed to
demand. So it obviously amounts to a drop in prices. But prices normally pick
up in January or February; so it’s in January and February that we will know if the drop in prices
is being caused by surplus supply on the market or is an effect of the world
But he notes that with the stocks and shares markets being
highly speculative, anything could happen.
Ndoping spoke against a
backdrop of fear gripping cocoa farmers and dealers in Cameroon. Many think the
credit crunch is finally affecting the price of their exports. Cameroon's cocoa
and coffee are traded on the London and New York stock exchanges.
Production has considerably
increased over the past few years. But for several weeks, there has been
concern over the possibility that the financial crisis will cut demand. He says, “If the banking crisis affects the
commodities market, then somewhere we might witness a drop in prices. So we
could unfortunately be affected, although right now we cannot say.”
A long economic crisis beginning in the mid-80s wrecked
several sectors of Cameroon’s economy, especially agricultural exports like
cocoa. Many farmers abandoned their plantations as demand for their crops sank. The government-run
national produce marketing board, which provided financing for farmers,
A new entity, the Cameroon Cocoa and Coffee Board was
created in 1991 to stimulate production, regulate marketing and monitor the quality of cocoa and
coffee produced for export. Ndoping
says thanks to several government and donor-backed measures, the country has
witnessed steady growth in cocoa exports, especially with increased investment
and improved farming
Over the past 30 years, Cameroonian production has risen
from over 123 thousand tons a year to more than 187 thousand tons, and there
are prospects of further expansion. The increased production has made Cameroon
the world’s fifth largest cocoa producer.
But he says he regrets that
the coffee sector has not made similar progress. Farmers, especially those in
the major coffee-producing northwest, stopped production during the economic
crisis of the eighties and nineties. Many switched to food crops. Some say they
could not compete in the world market against better-quality coffee from South
America, and West Africa.
But current attractive world market prices are reviving
interest in coffee growing and many farmers are going back to resurrect their
farms. Ndoping sees a bright future for Cameroon, currently ranked 19th
worldwide in coffee production. The government is helping farmers try to double
production by 2010. Arabica coffee
currently stands at 3,890 tons up from 3,100 tons in 2006. Production for robusta coffee has changed
little, at about 40,000 tons.
Government support includes exemptions from import duties on
imported inputs like improved seeds, and pesticides and their sprayers. It has
also put in place a financing program to help farmers reclaim abandoned
plantations. And, it’s building storage facilities in growing zones to cut down
on transportation costs by organizing workshops on improved farming practices,
helping organize farmers’ cooperatives, and facilitating farmers’ access to
Government officials say only better quality
produce, and the elimination of middlemen who do not respect world market
standards, will increase demand for Cameroonian coffee.