Ugandan cocoa farmers are facing mounting threats as thieves target their valuable crop amidst a surge in global prices for the product.
With dry weather hampering cocoa farming in Ghana and Ivory Coast which are the world’s leading cocoa producers, prices have skyrocketed to their highest levels in over a decade.
This spike has prompted a rise in thefts of cocoa beans in Uganda, with an estimated 30% of the country’s cocoa production being stolen.
Speaking to British Broadcasting Corporation (BBC), Mutanga Grace, CEO of Mkulima Exports Uganda and a cocoa farmer herself revealed that farmers are resorting to drastic measures to protect their harvest.
Reasons for Uganda Farmers Hiring Gunmen
By employing armed guards and dogs, the farmers are fighting to safeguard their cocoa, which has become increasingly lucrative due to its soaring market value.
Grace likened the demand for cocoa in Uganda to a frenzy, where even small quantities are fetching substantial sums.
“Cocoa in the country right now is like a hotcake, someone takes little but earns a lot of money,” she said.
Additionally, the global cocoa prices have reached an all-time high of $5,874 per ton on the New York commodities market.
This spike has doubled cocoa prices since the previous year, making it an increasingly lucrative target for thieves in Uganda.
Impact of Cocoa Crisis and Price Spike
The impact of this cocoa crisis spreads throughout the chocolate industry, with major manufacturers feeling the squeeze.
Hershey, one of the world’s largest chocolate producers, warned of the repercussions of the cocoa crisis.
Michele Buck, Hershey’s chief executive, hinted at potential price adjustments as a way to stay afloat in the business.
“Historic cocoa prices are expected to limit earnings growth this year,” he said.
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“Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business.”
Moreover, the ripple effects are already evident to consumers, with rising cocoa costs translating into higher prices for chocolate products.
Mondelez, the company behind the Cadbury brand, also cited escalating ingredient costs as a significant challenge.
Chief financial officer Luca Zaramella pointed out the firm’s struggle with “significant increases in both cocoa and sugar” prices.
Global Cocoa Shortages
In the UK, the impact of rising cocoa prices is felt keenly, with festive chocolate box prices surging by at least 50% within a year.
This outpaces overall food and drink inflation, underlining the severity of the cocoa crisis.
The situation is further escalated by poor harvests in West Africa, where the El Niño weather phenomenon has caused drier conditions, particularly in Ghana and Ivory Coast.
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Jack Scoville, an analyst at Price Futures Group, elaborates on the implications of climate-related challenges.
“Traders are worried about another short production year, and these feelings have been enhanced by El Niño that is threatening West Africa crops with hot and dry weather,” said Scoville.
The uncertainty surrounding future cocoa harvests adds another layer of complexity to Uganda farmers already precarious situation.
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