3 Reasons China Broke into The Africa Cocoa Market

The Africa cocoa market has been the bedrock of chocolate production in the world. Around 70 per cent of the world, cocoa bean comes from West African countries: Ivory Coast, Ghana, Nigeria and Cameroon.

Ghana and Ivory Coast alone produce 50 per cent of the world’s cocoa making both countries the largest producers in the cocoa market. Between 2017 and  2018 Africa’s cocoa bean production stands at 3.5 million tons with Ghana and the Ivory Coast being top producers.

Apart from nuts, cocoa remains one of Ghana’s most exported agricultural commodities.  In 2019 Ghana generated  US$1.45 billion from cocoa export an increase of 3.2 per cent compared to 2018 accounting for about 20 to 25 per cent of the country’s export.

Ivory Coast overtook Ghana as the leading cocoa producer in 1978 and is now the number one exporter of cocoa beans placing Ghana at number two. In 2017, Ivory Coast alone produced 1.8 million tonnes while Nigeria, Ghana, Cameroon and Togo accounted for the remaining 1.55 million tonnes.

In 2018, Ivory Coast recorded more production an increase to 2.15 million metric tonnes of cocoa bean produced. It accounts for about 40% of its international import.

China Cocoa Production

In October 2020, China announced its interest in exporting cocoa. 

According to its Chinese Academy of Tropical Agricultural Sciences (CATAS), the Asian superpower started its export of cocoa to its first buyer Belgium the planting of cocoa in China commenced in Xinlong located in the South China province of Hainan.

According to a researcher from CATAS Hao Zhaoyun, “Cocoa is a raw material for making chocolate with the increasing demand for chocolates, Hainan has been expanding its cocoa planting area and making breakthroughs in technological development”.

China reportedly cultivated its first and new variety called Reyin 4 and others varieties like ZYP6-8 and Xiangke1. They’ve both been evaluated by the international organisation and found to be unique and of high quality in 2021. China’s cocoa was selected amongst the 50 best entries in Bioversity International’s 2021 Cocoa of Excellence competition.

Reasons China was Able to Invade The market

Advanced Technology

In less than a year into cocoa production, China has created a machine to automatically harvest and peel cocoa. Farmers in Africa still subscribe to crude ways of farming. Many cocoa farmers make less than $1 per day, so they resort to child labour to stay competitive. 

Strong understanding of the cocoa market

China took enough time to understand the cocoa market before venturing into it, strategically positioning for its cocoa to be known globally.

In 2021, China participated in the Salon du Chocolate trade fair in Paris France.

This translated into a breakthrough in February 2022, where China’s cocoa was recognised by world-class Belgian chocolatier, Pierre Marcolini, who will help debut Grand Cru Hainan chocolate at his online store in June 2022.

Also, the chocolate was recognized by a US-based chocolatier Mark Huestch. He mentioned his willingness to showcase the chocolate to US consumers. He said, “Hainan cocoa beans have a unique flavour with strong red fruit and nut flavour’’.

Covid 19

Every day, over 2.8 billion (in the US alone) pounds of chocolate are consumed. A lot of factors contribute to the rise and fall of the cocoa price, but the  COVID-19 pandemic had a huge impact on cocoa production in 2019. It affected the volume, processing and even consumption. The whole supply chain was thrown into disarray.

These prompted a grant from global chocolate companies which donated about $835,000 to fund national emergency plans of governments in West Africa cocoa-producing countries.

China saw the opportunity to bring stability and leverage the disrupted market and since the market is predicted to grow annually by 5.48%  (CAGR 2022-2025),. A researcher from the CATAS, Hao Zhaoyun, said: “Cocoa is a raw material for making chocolate with the increasing demand for chocolates, Hainan has been expanding its cocoa planting area”.

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