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Cameroon: Cocoa Growers Profit from Ivorian Crisis

Crisis in Ivory Coast boosts the earnings of Cameroonian cocoa farmers

In recent months, cocoa growers in Cameroon have been happy.Prices for their crop have reached an all-time high of 1,400 FCFA [about US $3] per kilogram. That’s about double the high reached three years ago.

Officials at Cameroon’s National Cocoa and Coffee Board attribute the price spike partly to the protracted political impasse in the world’s top producer, Ivory Coast. The country accounts for 40 percent of global production. It’s been plunged into a quagmire since November following contested presidential election results.

Cocoa pods

Cocoa pods

Mr. Gbagbo is under increasingly severe international pressure to cede power to Mr. Ouattara, widely considered to be the winner. European Union sanctions aimed at forcing Mr. Gbagbo to hand over power are now threatening cocoa shipments from Ivory Coast, which produces a yearly average of 1.3 million tons.

Michael Ndoping, managing director of the Cameroon Cocoa and Coffee Board, says although prices are generally determined by supply and demand, commodities are rising because of speculation about the effect of the political crisis on Ivoirian farmers.

“We’re mixing two things. We’re talking politics, we’re talking business. Like you would know, the Ivory Coast is the No. 1 producer of cocoa in the world. So anything that happens in Cote d’Ivoire invariably has an impact on the market. We’ve noticed since August that prices have been sustained. We think that the crisis in Cote d’Ivoire has an impact. So that could account for the sustainable prices we’ve noticed for the last six months,” Ndoping says.

Experts predict the soaring prices will go through the roof if the standoff degenerates into warfare, impeding Ivorian exports. Meantime, producing countries are preparing to take advantage of the situation as anxiety steadily grows among chocolate manufacturers in the West.

Bags of cocoa for export

Bags of cocoa for export

In Ghana, the world's second largest producer, officials are even pondering ways to reposition the country as the world’s leading producer if Ivorian exports are eventually disrupted. Ivory Coast’s cocoa production overtook Ghana’s in 1978.

In Cameroon, renewed efforts at reviving the sector have been paying off. Production rose to 205,000 tons in the 2008/09 season and Ndoping says halfway into the current season, prospects are even brighter.

“We launched the season in August. As of today, we’ve exported 174,000 tons and that to us is a very big jump because last year at this period, we were at 134,000 tons. So there’s a difference of almost 40,000 tons and that’s a remarkable increase and so we can say the sector is doing very well. By the end of July, we should surpass 200,000 tons,” Ndoping explains.

The steadily rising prices are encouraging farmers to revive and expand abandoned plantations.

Growth in production of cocoa in Cameroon stalled in the late 1980s as world market prices slumped and high export taxes forced farmers to switch to staple crops like grain.

But since 2005, a combination of efforts has culminated in rekindled interest in cocoa. Export taxes have been scrapped, and farmers are benefitting from several programs providing high-yielding seedlings for free or at subsidized rates.

The programs have also sponsored access to inputs such as fertilizer and pesticides. This year some five million plants are expected to be distributed, and an additional 4,000 hectares of cocoa plantations will be created.

Cristel Pound, a grower in the country’s South Region says the Ivorian situation presents a golden opportunity to improve quality and quantity.

“ At the moment, weather conditions are favorable. There is low rainfall, which favors production and ample sunshine, which encourages fermentation and also allows us to dry our beans for longer periods. We’ve also noticed few cases of blackpod disease. That implies we can improve both our quantity and quality in a very short time. The decision-makers should now play their role,” Pound says.

Across Cameroon, farmers like Pound say the country’s infrastructure is a major drawback to rapid growth in cocoa, and all agricultural production. Poor transport links make it difficult and costly for farmers to get their products to market.

But the government says it is gradually building new roads to make production areas more accessible. It also says it’s setting up conservation units and processing plants and giving growers groups market information and best farming techniques.

It has also waged war against middlemen accused of not maintaining standards. Some convince cash-strapped farmers to sell them insufficiently-dried and fermented cocoa beans, which they then sell to exporters. They’re also accused of not giving farmers a fair price for their goods.

The government support package also includes duty exemptions on inputs like improved seeds and pesticides.

Many farmers groups have launched calls for the government to quickly disburse large subsidies while the Ivorian deadlock lasts. They say the crisis should serve as a motivation for them to increase production.