Cocoa Farming in Africa, a Bittersweet Tale

Cocoa Bean

Cocoa Products

Cameroon

Published May 6, 2021

Cameroon is currently the 3rd largest exporter of cocoa beans globally, shipping a value of USD 682.15 M in 2019, behind Ghana (USD1.85 B) and Cote d’Ivoire (USD3.58 B). Collectively Africa produces more than 70% of the world’s cocoa. The majority of the 600K cocoa farmers in Cameroon are rural, small-scale farmers who barely make enough money to survive. The USD130B global chocolate industry relies on cocoa farming by African farmers who make less than USD 1 per day. All-C Sarl is a Cameroonian cocoa processing company that has delved into the business of processing cocoa beans into products such as cocoa paste, cocoa butter, and cocoa powder. These processed versions of cocoa are far more lucrative in the export market than raw cocoa beans. Tridge interviewed François Gnamien, the Director of All-C Sarl, to gain further insight.

Imbalance in the cocoa supply chain

Historically, the Netherlands, Malaysia, and Indonesia have been the top importers of cocoa beans from Cameroon. These countries further process the raw cocoa beans to produce more lucrative products such as cocoa butter, cocoa paste, cocoa powder, and chocolate, which they export globally. In 2019, the Netherlands, Malaysia, and Indonesia were among the top 5 global cocoa butter and cocoa powder exporters. Not only is the Netherlands the leading importer of cocoa beans, but the European country is also the biggest processor, grinding 600K tons annually and the fourth leading exporter of chocolate products. Cocoa growers are among the lowest earners from a tonne of sold cocoa, accounting for only 6.6% of the final sale value. According to the World Bank, the threshold for extreme poverty is USD1.90/day. Cocoa growers in Ghana earn USD1/day, while farmers in Côte d’Ivoire earn approximately USD0.78/day, both lower than the poverty line.

This proves that investing in cocoa processing would yield far greater profit margins for Cameroonian and African cocoa producers, which All-C Sarl has used to their advantage.

“Previously, we used to export cocoa beans; now we focus on exporting semi-finished cocoa products. We now trade cocoa in the form of butter, powder, and paste. We recently installed new grinders at our facility, which has enabled a boost in our processing capacity. Demand for these products is high internationally, but the products are not so popular locally,” explained Gnamien.

All-C Sarl is working with local cocoa growers in Cameroon. They purchase the raw product from rural farmers and process it further in their well-established facilities. All-C Sarl has also expanded its range of products to include processed products like pineapple juice.

Addressing cocoa’s concerns

Recently, Côte d’Ivoire and Ghana have installed a fixed premium of USD400/tonne on cocoa futures to improve the livelihood of farmers and create a union for cocoa for the industry popularly known as COPEC. Companies such as UTZ Certified, Rainforest Alliance, and Fairtrade are increasing traceability in the supply chain by supplying ‘certified cocoa,’ bought from farms that prohibit child labor.