Global Impact of Chocolate?
The beloved chocolate comes from Africa’s finger tips.
Seen through the docuseries Rotten, the episode Bitter Chocolate dives into how Africa’s natural resources of cocoa contributes to the global economy through exportation of trade. Cote d’Ivoire makes up 40% of the cocoa bean production in the world and every ton of that is collected a handful at a time. The exploitation of labor and natural resources is at an all-time high in the cocoa industry. This is a result of a monopolistic competition market where there are 10 major traders of cocoa for the global production; so the production and distribution reach a choke point through these traders. Cocoa productions influences global consumptions rates, the economy surrounding a countries cocoa trade, and the overal global supply and demand chain of cocoa.
Cocoa is only grown with in 10 degrees north or south of the equator resulting in only a handful of countries capable of growing cocoa; meaning that african countries like Cote d’Ivoire, Ghana, Cameroon, Nigeria, etc. supplies the global demand for cocoa. Countries that consume the most chocolate, to no surprise, are western european countries. In a study done by Stataic, published in 2021 but collected in 2017, Switzerland consumed 8.8 kilograms of cocoa per captia, Austria close second at 8.1 kilograms per captia, Germany consumed 7.9 kilograms and in comparison to the U.S. sitting at a compution rate of 4.4 kilograms per captia. Countries that farm cocoa dont even get to taste the refine delacousy of chocolate, only smell the beans in the village.
The process of production takes advantage of the weak and strengthens the powerful. The pyramid starts with the local farmer at the bottom. The isolation of the farmer prevents them from enquiring any bargaining power. The only connection the farmer has to the market is the next man called the Pistore, he comes and collects the dried Cocoa from the remote villages. His position on the pyramid is to try to make as much money as he can by buy and reselling quickly to cooperatives. Though, this positon is one of the more dangerous positions on the pyramid, due to the travel with large sums of money, and large amounts of cocoa. Both products are in dire demand. The co-ops are a private business that’s goal is to collect / buy as much cocoa from the pistores as possible, for then they send it to the sea co-ops where they collect about 3,000 tons of cocoa a year. This is when they are places on ships or sent to corporations to then refine the beans to then send those private buyers of refines manjufaturable chocolate.
Cocoa beans spread to sun bake before sell.
Time and time again the entrepreneur mindset has capitalized on the lack of infrastructure in Africa. In the case of Bitter Chocolate, there was one instance where the company Transmar fell from the market drop of Cocoa in 2016. Here is why they fell, prior to the drop they had been selling at a fixed price and when the global market price for cocoa drops below this fixed price, the deficit loss of producing at that rate ensues. The market spiked to $3,000 per ton with the rumour that China was about to dip their toe in the Cocoa game. China did not. Resulting in an oversupply of cocoa on the market with no change in demand. At this point, the price dropped to $1,000 per ton resulting in the African producers (farmers) taking the hardest hit being the lowest in the pyramid. Each contributor and entity can affect the global economy, here we saw that the resources actually affected the global market by increasing supply when the globe was in no need of such demands.
A common trend seen throughout Africa (and the middle east) is the lack of nationlization. With proper nationalization of resources the a nation state is capable of enhancing the local economy. The cocoa trad is only one example of the exploitation and uses of post-colonial power over the impoverished of Africa. Cote d’Ivoires GDP per captia is $2,278 US dollars, the farmers make US $0.93 to $1 a day [2], while countries like Germnay that benefit from this resource mis-managment have a GDP per capita of $51,860. In 2020, the global chocolate market was valued at nearly USD 106.6 Billon [3]. The global mismanagement of the cocoa industry shows how Africa lost the power of the land again.
[1] Shahbandeh, M. “Cocoa Production by Country 2019/2020.” Statista, 26 Apr. 2021, https://www.statista.com/statistics/263855/cocoa-bean-production-worldwide-by-region/.
[2] Written by Govind Bhutada, Author. “Cocoa's Bittersweet Supply Chain in One Visualization.” World Economic Forum, https://www.weforum.org/agenda/2020/11/cocoa-chocolate-supply-chain-business-bar-africa-exports/.
[3] “Global Chocolate Market Report and Forecast 2021-2026.” Chocolate Market Price 2021-2026, Size, Share, Report and Forecast, https://www.expertmarketresearch.com/reports/chocolate-market.