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China cocoa is here: Should Ghana be worried?

Yes we should, and for good reasons.

The fact that it is not Mozambique, or Cape Verde but China is on its own a cause for concern. China, like Dubai and the United Arab Emirates, has in the last few decades emerged as a country with vision and dedication to accomplish its goals.

The Chinese have a stubborn resolve to accomplish what they set their eyes on. Today, China is the leading market for Electric cars, the biggest market for conventional combustion engine cars, the biggest importer of crude oil, the biggest smartphone market, among many others.

Their mammoth labour size, financial muscle and technological advancement makes them a dangerous competitor anywhere they are found.

Think of Huawei. When the Trump administration blacklisted Huawei, many observers thought the company would collapse. However the company survived and even increased smartphone sales, just by relying on the Chinese smartphone market.

So?

If China has set its sights on the cocoa market, then we have to prepare for hot competition. Here are some reasons:

1. Ghana sells raw cocoa beans, which has very little value on the international market. The global cocoa market is approximately $150 billion. But Ghana and Vote D'Ivoire collectively earn just about 5.35% of the money, despite producing about 86% of global cocoa.

2. China can easily become a producer, processor and even distributor. Many researchers agree that the chunk of the $150 billion is up there, at the processing and distribution levels.

If China decides to setup processing plants and begin exporting finished cocoa products, they are highly likely to earn more from the cocoa market than Ghana and Cote D'Ivoire would.

3. Even though China's current cocoa production (5 kg) pales in the face of Ghana's output (i.e. 263,000 tonnes for 2021), China has the capacity and will to dramatically increase production in a few years.

4. Cocoa prices are influenced by Western powers that buy our cocoa. China's politico economic standing as a global superpower means it is in a more advantageous position to influence cocoa prices much more than Ghana, with all our hundreds of thousands of tonnes in cocoa output.

Conclusion

So, instead us reclining in our arm chairs and tickling ourselves that China's cocoa production poses no threat to Ghana's cocoa, let us sit up and start thinking of innovative and commercially viable ways of adding value to Ghana's cocoa so that we can claim more of the whopping $150 billion cocoa market.

Content created and supplied by: Baffour Awuah (via Opera News )

Cape Verde China Dubai Mozambique United Arab Emirates

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