News has emerged that the Chinese Island province of Hainan has exported its first consignment of 500 kilograms of Cocoa beans to Belgium. This is the first time China is exporting the produce. The export, which was valued at 3,044 Euros, came from Hainan’s tropical township of Xinlong.
There has been extensive discussion on this news on Ghanaian media. In addition, it has been widely circulated on African social media for days now, causing deep anxiety amongst African social media users. While some have spelled doom for cocoa-producing countries like Ghana and Cote D’Ivoire, others have also cast doubt on China’s ability to displace Ghana and Cote D’Ivoire from their niche in the cocoa industry.
Despite making headlines recently, this story is actually several months old. Chinadaily first reported it on 28th October 2020, making it six months since the event took place. This article argues that despite the exasperation expressed towards China producing cocoa, China however cannot overtake African countries in cocoa production.
How important is cocoa to African economies
In Ghana and Cote D’Ivoire, cocoa farming is as important to the people as it is to the government. Whereas in Ghana 800,000 cocoa farmers directly produce an average of 800,000 metric tonnes of cocoa in a year, the cocoa value chain in the country employs more. According to Ghana Statistical Service, the cocoa industry supports the livelihood of four million farming households, while constituting 20-25 percent of total exports.
The government of Ghana, through COCOBOD – the state’s cocoa marketing agency, buys cocoa beans from smallholder farmers at prices below the world market benchmark. COCOBOD sells the cocoa to the international community at world market prices to realize a profit. The cocoa sector is an important source of foreign exchange earnings for the government. The government of Ghana sometimes relies on the profit accruing from COCOBOD to develop the country.
In Cote D’Ivoire, the story is similar. Having overtaken Ghana in 1978 to become the largest exporter of cocoa in the world, the country is probably even more dependent on cocoa revenues than Ghana. According to Esri, cocoa makes up 40% of the country’s total exports and 10% of GDP. Whereas there are 600,000 cocoa farmers in the country, the industry engages about 6 million people.
Nigeria and Cameroon also produce cocoa, but on a much smaller scale compared to Ghana and Cote D’Ivoire. West African countries account for 80 percent of global cocoa exports.
What are China’s prospects as it enters the cocoa production market?
Cocoa plants need high temperature, plenty of water, and air to grow. Such conditions can be found in tropical regions like Africa, South America, and some parts of Asia. If China has plans of venturing in the commercial production of cocoa, it has to consider the size of its tropical rain forest. However, unfortunately, according to Mongabey, Hainan Island is home to China’s only tropical rainforest, which covers a fraction of the island’s size of 35,354 square kilometers. Another Chinese province with weather conditions that could possibly support cocoa cultivation is Yunnan.
This availability of supportive soil and weather condition is a challenge that China must surmount if it is serious about commercially producing cocoa beans. However, China cannot do much concerning creating sustainable conditions for cocoa cultivation. In the unlikely situation that China defies this odd, it would come at a considerable cost.
Some have suggested that China could deploy technology to undertake commercial production of cocoa on territories that naturally do not support cocoa cultivation. While this could be possible, it is nonetheless economically unviable, as the cost would outweigh the benefits. The Public Affairs Manager of COCOBOD, Fiifi Boafo, downplayed China’s breakthrough in growing cocoa. He said that it does not make economic sense for China to produce cocoa using technology.
China producing cocoa, therefore, could only pass as a symbolic scientific breakthrough. It has no substantial economic prospect. This means the monopoly of cocoa-producing African countries is nowhere near the end.
There is no cause for worry; China cannot overtake African countries in cocoa cultivation
According to Food and Agriculture Organisation (FAO), the size of Ghana’s tropical rain forest is estimated at 9.17 million hectares accounting for 40 percent of the country’s total landmass. Cote D’Ivoire, according to World Bank has about 212,000 square kilometers of tropical land, which translates to 66 percent of the total landmass of the country. This means that Ghana and Cote D’Ivoire together have about nine times more tropical landmass than China. When we consider Cameroon and Nigeria, the scenario becomes even bleaker for China.
With this landmass, it would be easier for Ghana and Cote D’Ivoire to scale up and produce more cocoa than their current capacity, whereas China has no such luxury. Herein lays the comparative advantage of African countries. This should allay the fears of Africans on social media. It is evident that China cannot compete with African countries in the production of tropical agricultural goods, especially cocoa.
However, the fact that China has symbolically produced cocoa should awaken African countries because their monopoly on cocoa farming could be challenged by another country or group of countries on the tropic. The countries with the greatest potential to venture into commercial cocoa farming are mostly Latin American. This means cocoa-producing African countries must innovate and invest more in best farming practices to stay on top.
The fear of Africans about China taking over the cocoa-growing industry is a sign of concern for their countries’ wellbeing. However, due to the unavailability of a tropical rain forest, China would find it difficult to scale up production to meet commercial demands. However, the fact that China cannot pose a commercial threat does not mean cocoa-producing African countries should be complacent.
What do you think?
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Amodani is a past student of Koforidua Technical University. He is majoring in Biomedical Engineering. He has served as the past president of KTU Debate and Public Society. In that capacity, he helped students understand local and global issues and the impact they can have through constructive dialogue and debate. He is passionate about community advocacy and development. He aims at engaging in national and international politics after pursuing graduate studies in International Relations and diplomacy.