WEST AFRICA – Barry Callebaut, a Zurich based manufacturer of chocolate and cocoa products, is negotiating with the governments of the Ivory Coast and Ghana, the world’s two largest cocoa producers, to change the law on replanting.
Legislation put into place in 2018 in the West African countries prohibits farmers from replanting trees, said Peter Feld, chief executive officer of Zurich-based Barry Callebaut.
Supermarket Perimeter media agency quoted Feld saying, “I do think the message has landed with the governments both in Ghana, as well as in Cote d’Ivoire (Ivory Coast), but we need to put it in legislation. We need to continue to get allowance to go for seedling planting again.”
The state dictating the price paid to cocoa farmers in the Ivory Coast may curtail the incentive for cocoa farmers to increase planting, Feld added, explaining that no productivity improvement has yet to happen in Ghana, where the fixed farmgate price rose to US$3,000 per tonne several weeks ago.
He noted that the weather conditions in West Africa are better than a year ago, which should lead to a better harvest next year. However, it will still not be at the ’22-’23 levels.
“We can’t assume that for this harvest, we would have an improvement in productivity based on more money with the farmers and investment into fertilizers, into replanting and other activities,” Fled said.
“That’s different outside of Cote d’Ivoire and Ghana. For example, in Ecuador, where the farmer has actually benefited from the high cocoa prices and where you can clearly see an investment going forward into productivity in the farms.”
Cocoa bean prices hit an all-time high of about $12,540 per metric tonne in April and have almost doubled in the last 12 months to November.
The Swiss Chocolate maker has reported its latest annual results revealing flat sales volumes for the second year in a row, at CHF 2,279 million tonnes, a 22% rise in revenues to CHF 10.3 billion from its global operations.
According to the company’s results, the company’s global chocolate business saw an improvement of 0.3%, which stood against a declining wider market of 1.1% per industry data, as the business saw volumes for food manufacturers also reduce by 1.5%, which it said had been off-set by gains made within private label markets, which have continued to gain traction around the world.
The gourmet division, which reported 9.8% growth, and there was also an improvement for its Middle East and Africa region, was up by 5.2%, with the business opening key chocolate academies in Dubai and Morocco.
Meanwhile, in Latin America, there was volume growth of 7.2%, driven by Brazilian markets, while North America saw volume declines of 1.8%.
The company’s global cocoa results saw a 1.4% drop in sales volumes, related to major increases in cocoa prices, with cocoa butter and liquor also being impacted by constrained supplies.
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