Climate change threatens cocoa production in West Africa

Cote d’Ívoire, the world's largest single producer of cocoa, is facing a threat to its cocoa production due to unseasonal weather patterns in the West African state. The country is responsible for a third of the world's cocoa supply, making it a critical player in the global cocoa market. CNBC Africa spoke with Edward George, Echo Bank's head of research, to discuss the potential impacts of climate change on cocoa production in West Africa and the broader implications for the region's economy. George highlighted the delicate nature of cocoa cultivation, emphasizing the need for specific weather conditions to ensure successful crop growth. With changing weather patterns attributed to climate change, including disruptions to the usual rain and sun cycles, cocoa farmers in West Africa face growing challenges in maintaining optimal growing conditions for their crops. The unpredictability of weather events, such as the strong harmattan winds during El Nino seasons, has already affected cocoa production in the region over the past five years. Projections for the next two decades suggest a potential increase in dry conditions across West Africa, posing a significant threat to cocoa producers in countries like Cote d’Ívoire and Ghana. However, George also pointed out that technology could play a crucial role in mitigating some of the impacts of climate change on cocoa production. Advancements in agricultural technology, such as satellite monitoring and the use of drones, provide farmers with tools to track individual trees and areas, enabling them to address issues promptly. While climate change remains a major concern for delicate crops like cocoa, the adoption of technology offers a glimmer of hope for farmers in adapting to changing environmental conditions. The reliance of Cote d’Ívoire on cocoa exports as its primary source of revenue raises concerns about the economy's vulnerability to disruptions in cocoa production. Despite being the world's largest grinder of cocoa and a diversified producer of other soft commodities like coffee, natural rubber, and cashews, any significant decline in cocoa output could have ripple effects on the country's economy. However, George emphasized that Cote d’Ívoire's diversified production base could potentially cushion the impact of fluctuations in cocoa production, demonstrating the resilience of the economy to external shocks. In terms of market outlook, George discussed the recent volatility in cocoa prices, driven by a combination of supply dynamics and shifting demand patterns. While initial expectations pointed towards a lower cocoa crop in West Africa for the 2017-2018 season, the actual figures indicate a potential record crop in Cote d’Ívoire and a decent yield in Ghana. On the demand side, global growth and increased confectionery consumption have led to a rise in cocoa demand, offsetting the surplus and contributing to market stability. George anticipates that cocoa prices will hover within the range of 1,500 to 2,000 pounds sterling per ton, with potential short-term fluctuations in August-September as markets react to the transition between crop seasons. Overall, the evolving climate conditions in West Africa present a significant challenge for cocoa producers, with implications for both the local economy and the global cocoa market. As stakeholders grapple with the effects of climate change, the integration of technology and diversified production strategies emerge as key elements in navigating the uncertain future of cocoa cultivation in the region.