Ghana reinforces processing to boost cocoa returns

Ghana, known as one of the largest cocoa producers globally, is stepping up its processing efforts to enhance cocoa returns and develop a thriving domestic chocolate industry. The World Bank has reported that cocoa prices have remained relatively stable over the past eight months, with global production for the current season expected to be nearly 5% higher than the previous season. In a recent interview with CNBC Africa, independent commodities expert Edward George shared insights on Ghana's cocoa processing initiatives and the implications for the industry. George highlighted the importance of adding value to raw cocoa through processing into various products and emphasized the significance of creating a strong domestic demand for cocoa products. He commended Ghana's efforts to establish a distinct brand identity for its cocoa products, focusing on eco-friendliness and premium quality. However, George noted that Ghana still has a long way to go in fully realizing the potential of local cocoa processing. The country aims to reduce its reliance on exporting raw cocoa and strengthen its position in the global cocoa market by boosting local consumption. The current season has seen record cocoa production in Africa, particularly in the leading producer, Cote d'Ivoire, with port arrivals exceeding expectations. Despite the bumper crop, external factors such as the COVID-19 pandemic and strong production have influenced cocoa prices and demand. George expressed optimism about the region's cocoa prospects but cautioned that prolonged dry spells in Cote d'Ivoire could impact production levels. Additionally, the issue of illegal mining, known as Galamsey, poses a growing threat to cocoa production in Ghana. The destructive mining practices not only degrade land but also hinder agricultural activities. George stressed the need for economic incentives and improved monitoring to curb illegal mining activities and preserve arable land for cocoa cultivation. While Ghana has implemented initiatives like the Living Income Differential (LID) to boost farmer income, challenges remain in transparent disbursement and effectiveness of such schemes. George highlighted the complex market forces that can negate the intended benefits of income support programs. Furthermore, evolving regulatory frameworks, such as potential EU laws targeting issues like child labor and environmental sustainability, are set to impact West African cocoa producers. These regulations aim to promote sustainability and ensure compliance with international standards in cocoa value chains. George emphasized the importance of technology in enhancing traceability and sustainability practices across African value chains, aligning them with global expectations. Overall, Ghana's efforts to reinforce cocoa processing and navigate evolving market dynamics position the country to capitalize on the growing demand for sustainable cocoa products and secure better returns for its farmers.