Impact of Climate Change on Cocoa Production and Chocolate Prices

Environmental disruptions from climate change are leading to the decline of cacao trees, resulting in soaring chocolate prices and highlighting the vital need for sustainable cocoa practices in the U.S. and Europe. Key cocoa-producing regions are experiencing climate-related challenges, prompting stakeholders to initiate sustainable cocoa projects to support farmers and maintain supply chains.

Climate changes have significantly impacted cacao production, leading to rising chocolate prices and emphasizing the necessity for sustainable cocoa initiatives in the United States and Europe. Alterations in temperature and humidity patterns in a 40-degree band around the equator, where cacao trees thrive, are affecting environmental conditions crucial for cacao cultivation. This equatorial region encompasses countries such as Brazil, Cameroon, Côte d’Ivoire, the Dominican Republic, Ecuador, Ghana, Indonesia, Nigeria, and Peru, which together generate approximately 90% of the world’s cocoa beans, reaching around five million tonnes each year. Cacao trees are particularly vulnerable to environmental fluctuations and tend to produce insufficient beans under diverse climatic conditions and extreme weather events. Farmers are facing serious challenges as new cacao plants require a minimum of three years to yield beans. In Cote d’Ivoire and Ghana, which produce over half of the global cocoa supply, warming temperatures have fostered mealybug populations, which thrive in hotter and wetter climates. These insects are carriers of a lethal swollen shoot virus, reportedly responsible for the death of approximately 200 million cacao trees, leading to skyrocketing cocoa prices. Additionally, the National Oceanic and Atmospheric Administration (NOAA) attributes the rise in heat waves and intensified rainfalls to the spread of black pod disease, a fungus detrimental to cacao trees. According to a March report from the United Nations Trade and Development Office (UNCTAD), cocoa bean prices have surged, with futures reaching a historic $10,000 per metric tonne for the first time. UNCTAD has noted that “Extreme weather and changing climate patterns have upended crop harvests, which are expected to fall short for the third year in a row, tightening global supplies and raising prices,” highlighting a 136% increase in cocoa prices between July 2022 and February 2024 due to climate-related issues. In response to these adverse effects, U.S. and European stakeholders, including major chocolate manufacturers, are seeking sustainable cocoa solutions. A notable initiative is being undertaken by the U.S. Agency for International Development, which, in mid-2023, partnered with the Indonesian government and private sector to educate 6,500 cocoa and coffee farmers on sustainable agroforestry practices. This project aims to enhance crop diversity, improve tree health, and adapt to ongoing climate changes. The United States remains a principal market for chocolate products, importing $3.9 billion and exporting $1.9 billion worth of cocoa items in 2023, as reported by the U.S. Department of Agriculture. The foremost markets for American chocolate exports were Canada, Mexico, and Vietnam, consuming significant portions of these goods. Europe is also advancing sustainable cocoa efforts, with Germany initiating the “German Initiative on Sustainable Cocoa,” which aims to ensure that all cocoa purchased by initiative members is sustainable. As of 2023, Germany has increased the sustainability level of cocoa sweets to 92.2%. Meanwhile, the Swiss Platform for Sustainable Cocoa, encompassing government bodies, chocolate manufacturers, and research organizations, aims to have 80% of all Swiss cocoa imports derived from sustainable sources by 2025. Enhancing awareness of sustainable cocoa practices can positively impact not only the availability of chocolate products but also significantly improve the living standards of cacao farmers and their families, fostering a more equitable and sustainable chocolate supply chain.

The article examines the intricate relationship between climate change and the cocoa industry, focusing on how environmental disruptions are leading to cacao tree die-offs and escalating chocolate prices. It highlights the geographical areas crucial for cocoa production and discusses the rising challenges faced by farmers due to extreme weather conditions and pest infestations caused by climate change, outlining international efforts toward sustainability in cocoa cultivation.

In conclusion, climate change poses a significant threat to cocoa production and, consequently, the chocolate industry, driving prices higher and necessitating sustainable practices. Stakeholders in the U.S. and Europe are responding with initiatives to support cocoa farmers and ensure that cocoa production adapts to evolving environmental conditions. Such efforts not only aim to stabilize cocoa supply chains but also strive to enhance the livelihoods of those involved in cocoa farming, which is essential in addressing the dual challenges of climate change and economic viability in the sector.

Original Source: www.forbes.com