What does China's entry mean for Africa's cocoa producers?

China recently made headlines by commencing the export of cocoa beans to Belgium, the third biggest importer of the commodity. This move has raised questions about what it means for major cocoa-producing countries in Africa like Ghana and Ivory Coast. In a recent interview on CNBC Africa, Olawale Rotimi, CEO of J.R. Farms, shed some light on the situation. Rotimi highlighted that while the quantity exported by China may currently be small, it signals the potential for increased competition in the market. He emphasized the need for African producers to focus on adding value to their products to stay competitive. With China potentially entering the market on a larger scale, there is a risk of price competition that could affect African producers. Rotimi stressed the importance for countries like Ghana and Ivory Coast to explore value-added options for their cocoa production. Notably, Belgium, a major importer of cocoa, received around 500 kilograms of cocoa from China, indicating the country's growing presence in the market. Rotimi drew parallels to China's dominance in other sectors like technology, highlighting the need for African countries to enhance their value addition capabilities. He referenced initiatives such as Ghana's partnership with Rwanda to establish a chocolate production industry, with Ghana supplying raw materials for the venture. This collaboration reflects a strategic approach towards value addition in the cocoa industry. Rotimi also mentioned the emergence of chocolate production companies in Nigeria, Togo, and other African nations, signaling a shift towards more domestic processing of cocoa. Addressing concerns about the competitiveness of African chocolate products compared to foreign brands, Rotimi underscored the need to address psychological barriers around product perception. He emphasized the importance of improving the quality, branding, and packaging of African chocolate to meet global standards and compete effectively in the international market. Overall, Rotimi's insights highlight the importance of value addition and strategic partnerships for African cocoa producers to navigate the changing dynamics in the cocoa market effectively.