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Wednesday, November 5, 2014

Cocoa bean - Ghana .... price of chocolates likely to go up !!!

Sure you know of Cocoa bean……..almost  all of us are addicted to chocolates. They are made of cocoa bean.... the dried and fully fermented fatty seed of ‘Theobroma cacao’, from which cocoa solids and cocoa butter are extracted. A cocoa pod (fruit) has a rough and leathery rind about 3 cm thick (this varies with the origin and variety of pod). It is filled with sweet, mucilaginous pulp (called 'baba de cacao' in South America) enclosing 30 to 50 large seeds that are fairly soft and white to a pale lavender color. While seeds are usually white, they become violet or reddish brown during the drying process.

Republic of Ghana,  located in Gulf of Guinea and Atlantic Ocean, in West Africa is famous for cocoa beans.  A Govt Organisation there controls the pricing, procuring and export of cocoa beans from Ghana.  There is also Hot chocolate (known as hot cocoa), a heated beverage typically consisting of shaved chocolate, melted chocolate or cocoa powder, heated milk or water, and sugar ~ the prices of cocoa pods are likely to go up, eventually making your chocolates dearer……… the reason … read on !!

Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan, are donating $25 million to the CDC Foundation to help address the Ebola epidemic. The money will be used by the US Centers for Disease Control and Prevention's Ebola response effort in Guinea, Liberia and Sierra Leone and elsewhere in the world where Ebola is a threat, the foundation said. The grant follows a $9 million donation made by Microsoft co-founder Paul Allen last month.  Also on Tuesday, the World Health Organization said West Africa could see up to 10,000 new Ebola cases a week within two months and confirmed that the death rate in the current outbreak is now 70 percent. The disease has killed more than 4,000 people, nearly all of them in West Africa. The WHO has called the outbreak "the most severe, acute health emergency seen in modern times."

Cocoa is the chief agricultural export of Ghana and the country's main cash crop. Behind Ivory Coast, Ghana is the second largest cocoa exporter in the world. Ghana’s cocoa harvest, the world’s second-biggest, will meet the government’s forecast for crops close to or at a record amid favorable rains, according to the meteorological agency. The West African nation is “confident” the 2014-15 harvest will exceed 1 million metric tons, Chief executive officer of the Ghana Cocoa Board, said last week.  The nation raised farm gate prices 63 percent to 5,520 cedis ($1,714) a ton this month to curb smuggling to neighbouring Ivory Coast, the largest producer.

The Guardian reports that when  the cedi depreciates and cocoa prices stagnate, illicit trading in neighbouring Ivory Coast rises.  As is with farmers in many countries, Ghana farmers also feel that though they have been the backbone of the country’s economy, their lives have not been transformed.  It appears that Ghana, hailed until recently for its strong economic growth, is now struggling, which led to demonstrations in the capital Accra last month over government corruption and the depreciating worth of the cedi, which has lost as much as 40% of its value against the dollar. Ghana’s economic woes have hurt farmers, who say basic operational costs, including the price of fertiliser, have risen sharply over the past three years. Despite this, Cocobod has not increased the price it pays for cocoa – farmers still receive 212 cedis (£36.63) for a 64kg bag.

Ghana’s ruling National Democratic Congress party said in its manifesto that Cocobod would “strive to pay the cocoa farmer at least 70% of the world market price of cocoa”, as well as cover the cost of pest control, and improving roads and production methods. The board says fertilizer is free for farmers but there are farmers who are not covered by this programme.  Under Ghanaian law, farmers are only allowed to sell their beans to purchasing clerks who act as intermediaries between them and Cocobod. In recent months anti-smuggling taskforce has boosted its efforts to curb illegal cross-border trading. Still there is problem for the Ghana cocoa farmer.

More than the economic reasons, the much feared epidemic - Ebola outbreak is set to make the price of chocolate soar after huge rise in cost of cocoa beans.  There has been growing demand from countries like China whose consumers are fast developing Western-style tastes for chocolate that they never used to have.  According to Daily Mail, experts warn that Chocolate prices could soar by up to 20 per cent as a result of the Ebola outbreak in Africa.  Manufacturers of chocolate will decide how much of the price hike they pass on to the consumer, but it is inevitable that prices of products on shop shelves in Britain and elsewhere  will rise. The problem is the fear factor, according to analysts as the crop is good, supply is high and the countries which produce most of the world's beans have not been hit by Ebola.

But these nations - Ghana and Ivory Coast mainly - do have borders with countries like Liberia where most of the 4,000 deaths to date have been recorded, said analysts Mintec.  This affects transportation links in the area, migrant workers from disease affected countries but, mainly, the fear that Ebola could spread to cocoa producing nations. With the main harvest in progress, concerns have risen that the spread of Ebola will disrupt ban shipments as West African regions have already seen some transportation disruption. West African countries supply around three quarters of the world's cocoa for chocolate production and for them it is also their major export. It means the crisis could affect hundreds of thousands of livelihoods in the region.

~ and that is not sweet news for sweettooths.
With regards – S. Sampathkumar

15th Oct 2014.

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