Oba Dokun Thompson, the Oloni of Eti-Oni and the Chairman Eti-Oni Development Group, an expert in the cocoa and chocolate industry, in this interview with Seyi Taiwo-Oguntuase, spoke on the effect of the COVID-19 lockdown on the Cocoa and chocolate industry. He also spoke on the need for Nigeria and other West African countries to be more serious about value addition and not depend solely on the export market which they really have no control over. Excerpts:
What is the current state of Cocoa now as the nation is battling with covid-19 and what has been the effect of the lockdown on the Cocoa sector?
At the peak of the covid-19 outbreak the western economies shutdown. West African cocoa experienced a bit of uncertainty which saw the prices initially deep. This was at the beginning of the harvest season of the light crop and the entire global supply chain experienced disruption because not too long after West Africa also had to join the global lockdown.
What happened later was no surprise as the base price of cocoa began to appreciate perhaps because of an anticipation of the likelihood that farmers may not be able to fulfill future demands if the covid-19 crisis extended beyond expectations and processors wanted to secure their supplies.
As of today, as things are being eased down, we see another rise in cases and there are speculations of another lockdown so we are really living under very challenging and unpredictable times.
Just as I said earlier, the lockdown saw little or no economic activities that even stores ran out of supplies. In coca producing communities, the light crop season was completed and production continued for the main crop season which is about three months away under very difficult conditions due to lack of some basic needs.
For chocolates, consumption dropped and artisan manufacturers took most of the hit, first mainly because of the size of their operations. Secondly, the source of their supply of cocoa beans and the ability to get end products to their customers. Today, all that is changing slowly and we can only hope for a continued steady and upward rise for return to normalcy.
What other consequence has the pandemic caused the Cocoa industry?
Just like all industries were affected, the effect in the case of cocoa can be said to be of global magnitude because cocoa is one of the few agricultural products that is well integrated into a global supply chain even though the value end favours mainly the consumption rather than the production. This end was where the pandemic hit the most but of course we cannot say for certain that it is over but we will continue to be optimistic.
Supply chains were affected, businesses were lost meaning; loss of jobs and the full effect may not be known until about another year or so that in some cases people may not see some of their favourite chocolate brands again.
What do you have to say to cocoa exporters and the effect of the lockdown?
At the beginning of the lockdown, concerns were raised more by mainly consumers, I mean the traders and exporters across Europe and North America on the overall impact to the chocolate industry with several interest groups asking for a call to action and my reaction to that is simply, action to what really? It is really not about being critical of papers, articles or conversations centred around Cocoa and Cocoa Farmers because the ICA 2010 of which Nigeria is a signatory covers a lot of serious issues around child labour, servitude, human trafficking, improving of cocoa farmers welfare and the building of local cocoa economies and these are all still very apparent now with the coronavirus in 2020. Yet after several papers and conferences the story remains same over the last 30 years.
So, for me the call to action by non-producing communities raises a two-part question, is it about the farmers welfare or the ability of the farmers to be able to supply the consumption end to ensure the base price of cocoa is not beyond what the buyers are willing to pay for it and in the event that happens, how will the consumption end be affected? At some stage, one will have to give way for the other and I know the solution will not come from the consumption end but the production end and the request of an increased base price of cocoa from West Africa is only the beginning and should also not be the solution. Ivory Coast and Ghana should be looking at ways of allowing free market forces to determine the prices while still putting in place a mechanism and system that guides and monitors to ensure quality and standards are maintained while value is created.
In addition, a lot is missing in the area of social and cultural understanding to help bridge the gap between consumption and production. Right now it is massive and will only get deeper and wider. We need to start focusing on solutions that will not just have the cocoa as part of the global supply chain but we must begin to design strategies that will integrate locals or producers in the global value chain.
On the whole Nigeria and West Africa need to be more serious about local value creation and not depend solely on the export market which they really have no control over. We need to contentiously work on moving away from being extraction regions to developing a more integrated structure so we do not repeat the same blunder of the oil industry while we pursue building a robust and buoyant non-oil economy.