African cocoa grower disparities will mar reform plans

Subject West Africa cocoa prospects. Significance Global cocoa markets are expected to remain oversupplied during the 2017/18 planting season, with Ivory Coast and Ghana -- which together account for 60% of world supplies -- expected to produce 1.9 million tonnes and 850,000 tonnes respectively. Thereafter, the slump in prices could deter investments in plantations, particularly in Ivory Coast where the farm gate price has been slashed. This could could sow the seeds of a new boom cycle -- especially if it compounds longer-term supply bottlenecks that have resulted from underinvestment in rehabilitating ageing and diseased tree stocks. Impacts Deforestation from cocoa farming will come under increased scrutiny as a result of international goals to combat climate change. Health trends in Western markets could reduce structural appetite for cocoa products amid flagging demand in emerging markets. Farmers are likely to switch to other crops like rubber and palm oil if prices fail to recover quickly.

Significance While the overall number of incidents is fewer than a dozen since the rise of the region's jihadist insurgencies in the early 2010s, the trend lends credence to growing warnings about the jihadist threat to coastal West African countries. Concern has focused on Ivory Coast and Benin, but there is also nervousness about Ghana, Togo and even Senegal. Impacts Western governments will boost security assistance to coastal states. Intelligence sharing and joint operations will not forestall cross-border hit-and-run attacks. Most regional states will resort to security-focused responses whose abuses drive jihadist recruitment.


Subject West Africa ports development. Significance Economic growth and rising trade volumes with Asian countries are straining West Africa's commercial port capacities. Various port infrastructure projects are underway as states compete to become shipping gateways for the region. Ever larger container ships are also forcing states to offer deeper water berth ports. Ivory Coast, Ghana and Nigeria are leading the race. Impacts Low oil prices should not affect port expansion as the costs are borne by competing private sector operators. The question of whether the operator-driven port model delivers equivalent benefits to individual economies will grow as profits rise. European private sector port operators continue to dominate, but competition from Asian companies such as DP World is growing.


Subject Outlook for Islamist militancy in West Africa. Significance Over the past four months Islamist armed groups have carried out high-profile attacks in Burkina Faso, Ivory Coast and Mali. Such incidents are not new in the Sahel, but the methods and scale have changed. To some extent this mirrors changes seen in Nigeria, Kenya, the Middle East and Europe, where attackers explicitly target civilians in a bid to attract media attention. Impacts The risk of further attacks is unlikely to shift positive investor sentiment towards Ivory Coast, which is driven by strong GDP growth. Airport security will likely come under fresh scrutiny given recent bombings and hijackings in Somalia and Egypt respectively. Cameroon is vulnerable to further attacks given its involvement in the regional anti-Boko Haram force.


Subject Ivory Coast's investment-led boom. Significance The Center for Investment Promotion (CEPICI) forecasts foreign direct investment (FDI) to reach 1.37 billion euros (1.53 billion dollars) in 2016, up from 1.02 billion euros the previous year, according to its 2015 Annual Report. FDI inflow would then rival larger economies such as South Africa (1.5 billion dollars in 2015) -- a realistic scenario given the government's large project pipeline. Impacts The US Millennium Challenge Corporation's December 2015 selection of Ivory Coast for a 'compact' will open fresh donor funding. The country's credit rating upgrade to 'B+' from 'B' by Fitch will boost investor confidence regarding macroeconomic management. Membership of the CFA franc zone, which is backed by the French treasury, will preclude significant currency volatility. If completed, the planned 300-million-dollar San Pedro port expansion will boost exports of value-added cocoa products. Air Cote d'Ivoire's new aircraft purchases and planned new routes will improve connectivity between Abidjan and other regional hubs.


Subject West Africa cocoa outlook. Significance Strong demand for chocolate is helping to lessen the global cocoa supply glut. This could underpin a more stable recovery in prices amid bumper crops in the world’s top two cocoa growers, the Ivory Coast and Ghana. On the supply side, efforts to reduce production will likely face headwinds over practical fiscal and livelihoods considerations. Impacts The stability of global consumption growth may be clouded by one-off domestic factors driving growth in some countries. Output restrictions in Ivory Coast and Ghana may be undermined if planned Nigerian and Cameroonian increases of cocoa materialise. Quality issues will be a natural hedge against smuggling in Nigeria and Cameroon where beans are sold at a discount.


Subject Prospects for West Africa in 2018. Significance Ruling coalitions will emphasise economic recovery (Nigeria) and foreign investment gains (Ivory Coast), while fragile transitions beckon for post-conflict states (Sierra Leone). Militant terrorist threats are plaguing countries across the region (Burkina Faso, Mali, Niger, Nigeria), heaping added pressure on ruling alliances to improve counter-terrorism preparedness.


Author(s):  
Kenneth Ofori-Boateng ◽  
Baba Insah

Purpose – The study aimed at examining the current and future impact of climate change on cocoa production in West Africa. Design/methodology/approach – A translog production function based on crop yield response framework was used. A panel model was estimated using data drawn from cocoa-producing countries in West Africa. An in-sample simulation was used to determine the predictive power of the model. In addition, an out-sample simulation revealed the effect of future trends of temperature and precipitation on cocoa output. Findings – Temperature and precipitation play a considerable role in cocoa production in West Africa. It was established that extreme temperature adversely affected cocoa output in the sub-region. Furthermore, increasing temperature and declining precipitation trends will reduce cocoa output in the future. Practical implications – An important implication of this study is the recognition that lagging effects are the determinants of cocoa output and not coincident effects. This finds support from the agronomic point of view considering the gestation period of the cocoa crop. Originality/value – Although several studies have been carried out in this area, this study modeled and estimated the interacting effects of factors that influence cocoa production. This is closer to reality, as climatic factors and agricultural inputs combine to yield output.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Prabal Barua ◽  
Syed Hafizur Rahman ◽  
Maitri Barua

PurposeThis paper is designed to assess the sustainable value chain approaches for marketing channel development opportunities for agricultural products in coastal Bangladesh to combat climate change through an approach of community-based adaptation options.Design/methodology/approachThe study was designed to select the potential value chain candidate and to analyze and establish a value chain map to benefit the crop farmers. In this connection, the resources of the whole context were evaluated. The approach uses few tools to generate three outputs, the last of which are the final list of value chains selected for in-depth assessment to design interventions as community-based adaptation practices of the study to combat climate change in the study areas.FindingsThe study demonstrated that the difference in the institutional circumstances of the end markets of the agriculture products is connected to the different categories of harmonization and control of the facilitating environment throughout the supply chains. National and local networks improve the value chain in terms of the value addition of the agriculture products, technology improvement, market access and profitability of the products. Strengthening the weak financial structure, focus more on formal financial systems and resolving sociocultural and climate change-induced hazard concerns are the major concerns on the development of value chains in the countries. Apparently, guarantee for good governance, checking illegal and unregulated market contexts, proper mitigation measures to climate change are some paramount important issues for the sustainable management of livelihood, yield, income and development.Practical implicationsAll kinds of stakeholders of the agriculture product value chain should focus on competitiveness and productivity and look for and exploit multiple ways to add value once initial success has been attained with a single deal. Ensuring sustainability within the value chains is an important feature to cater to the challenges and changing demands of the age.Originality/valueThe study will help to established a sustainable value chain approach in response to climate change, which process will help to existent opportunities for firms to manage the issue of climate risk by codeveloping and employing adaptation options that may be more preferred or accepted by consumers across the entire chain for the sustainable management of livelihood, yield, income and development.


Subject The Paris climate agreement. Significance The Paris agreement is the first major international pact to combat climate change since the Kyoto Protocol of 1997. If implemented, the pact envisions robust national efforts to reduce greenhouse gas emissions and cope with the adverse effects of global warming, with significant political, economic, social and sectoral implications. Impacts Paris accord transparency measures will facilitate carbon divestment campaigns in the West. Aviation and shipping emissions are likely to be addressed in a future Paris accord review conference. Migration from climate change-vulnerable states will reopen the legal issue of internationally recognised 'climate refugee' status.


Subject Outlook for cocoa production in West Africa. Significance Erratic rainfall and outbreaks of black pod disease in Ghana, along with ethical concerns in the Ivory Coast, are driving market fears of global cocoa shortfalls for the coming 2015-16 harvesting season. Anticipating a supply crunch, cocoa futures on the London-based ICE Futures Europe and the New York-based ICE Futures US exchanges today traded at highs of 2.21 pounds per metric tonne (MT) and 3.28 dollars per MT respectively. Impacts The expansion of French retailers such as Carrefour in Ivory Coast should provide opportunities for marketing locally produced chocolate. Opposition to genetically modified cocoa crops could hamper their adoption in Ghana, marring climate resilience initiatives. If effective, clampdowns on poor labour conditions in Ivory Coast could reduce remittance flows to poorer neighbouring states. Firms providing accreditation services in response to rising demand for 'ethical' cocoa could be hampered by poor data.


Sign in / Sign up

Export Citation Format

Share Document