Ivory Coast Cocoa Beans Economics Essay

Ivory Coast or Cote is a country in West Africa and has an area of ​​322,462 square kilometers with a view to the borders of Liberia, Guinea, Mali, Burkina Faso and Ghana, and its southern boundary is the Gulf of Guinea, where cocoa is and remains the country’s main economic resource, providing an average of about 35% of the total value of exports from Ivory Coast (Source: studentoftheworld). There are about 3 to 4 million people working in the cocoa sector (producers, trackers, entrepreneurs, cooperatives, exporters and local processors) to 2.5 million hectares of cocoa plantations operated by about 700,000 farmers. Southwestern Côte d’Ivoire has established itself as the main production area, and the port of San Pedro became the first port of Côte d’Ivoire cocoa (Source: Abidjan.net). Been largest cocoa producer, later, after leading producer Ivory Coast are Ghana, Indonesia, Nigeria, Cameroon and Brazil. Closing stocks of cocoa in the 2010-11 crop year rose 7.2% year / year to 1.763 metric tons (Source: Spectrum products)

Cocoa was first imported into Spain from South America in 1528 by Hernán Cortés. in 1635 the cocoa is grown successfully in Ecuador by the Capuchin monastic order and the end of the 17th century, other European nations were able to establish cocoa production in areas suitable for cultivation in the Caribbean and South America: Curacao ( Netherlands), Jamaica (Great Britain), Brazil (Portugal), Guyana and Grenada (France). During the 19th century, the growing demand for cocoa has led to its introduction in Africa, Principle Santo, Santo Fernando Po, Nigeria and Ghana. Between 1925 and 1939, production increased in Africa in the 19th century, chocolate was regarded as part of the staple diet of the French family (Source: zchocolat).

Market size

World market is expected to grow from 83.2 million in 2010.to $ 98.3 billion in 2016 and an estimated 2.7% from 2011 to 2016 the consumption of chocolate increases two times faster than cocoa production . Chocolate consumption increases tangentially to 3% in production when the growth was only 1.5% per year. The gap between production and consumption is likely to increase further in the coming years because retailers want to expand the market of Eastern Europe and China (Source: Consumption of chocolate). In early 1990, Asia has developed an interest in the chocolate market more Japan experienced a significant increase in the consumption of chocolate during the last decade. Demand in China has risen to 9,000 tons in 2000, an increase of over 90% compared to the previous year. Among the cocoa producing countries, Brazil has experienced an increase of 10% of annual consumption per person since 1993 (Source: zchocolat).

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Global consumption is estimated at 2.8 million tons per year. The largest importers of cocoa Europe (more than 1.2 million tons per year) and the United States (0.4 million tonnes per year). European countries are the largest consumers of cocoa and chocolate. Each country has its own preferences and style of chocolate, the popularity of different products that vary according to the national taste. On average, the Swiss quartet around 10.55 kg of chocolate per person per year. As a nation, Britain consumes more than 500,000 tons of chocolate per year. In France, the average per capita consumption of 6.8 kg per year, New Year and Easter are the most important occasions for tasting and chocolate gifts. European countries is considered as an important new emerging market and should remain so in the near future.

Planting / Supplier

My factory is located in the main area where they grow cocoa beans. As being, we must ensure that the products used in the manufacture of chocolate are easy to find, cheap to buy and not going to cost a lot when delivered to the factory, but Africa is full of materials that often dominate a “chain supply “logic, West Africa exports 90% agric-food industry in Europe. The major producers of cocoa beans come from West Africa, which grew by 37.3% and 19.7% of total world production in 2007 (Source: europa.eu). Producers in the South (Africa) provided 3.5 million tons of cocoa, which is mainly consumed in Europe today, cocoa farming covers about 10 million hectares worldwide. There are about 3 to 4 million people working in the cocoa sector in West African countries with 2.5 million hectares of cocoa plantations operated by about 700,000 farmers. (Source: Abidjan.net). Regular cocoa represents 95% of world production in West Africa supplies about 70% of world production (Source: zchocolat), Côte d’Ivoire with the most important country in the production of cocoa. Traditionally, cocoa is grown in producer countries and sold for export in the form of beans. Importing countries then process the beans, the transformation of raw materials or semi-finished products (cocoa butter, cocoa liquor, cocoa powder, etc.) due to its importance in terms of global production, producers West Africa seeks to increase cocoa production. Growing cocoa is an important source of income for many smallholder farmers. Most plantations are family farms of 2-10 hectares (Source: zchocolat). This production is particularly important in terms of demand of the national economy for the local cocoa is relatively low and therefore most of the production is exported.

The economic growth

After appearing in French West Africa, Ivory Coast has been hit by years of stagnation in a failed coup in 2002 divided the country and a brief post-election war has killed thousands. The IMF expects a growth of over 8.1 percent, inflation was 1.7 percent in June, down from 1.9 percent at the end of last year. However, Ivory Coast showed signs of recovery at the end of the war and the economy was better than expected in the first half of 2012, the outlook for 2013 is positive, with continued strong growth and low inflation, said Michel Lazare , the head of the IMF mission in Ivory Coast (Source: Yahoo News), where, in 2009, GDP growth was 3.8%, due to political instability in recent decades (Source: CIA), but its economy is stable and growing.

The global recession

Demand continues to grow cocoa beans, even thought the world was affected by the global economic crisis. World cocoa grindings in 2010-11 season increased 2.8% y / y to 3.780 million tonnes, a new record. Europe is the world’s largest consumer of cocoa consumption at about 37.1% of world production (Source: zchocolat). The fact is that chocolate consumption is dominated by Western countries, with 70% of the lucrative market where chocolate sales are concentrated in these countries. Over 90% of the world’s cocoa comes from small 5.5 million, approximately 3.5 million tons of cocoa are produced each year, nearly 50 million people depend on cocoa for their livelihood, West Africa produce more than 50 % of cocoa in the world. In 2010, 1% of world production was sold to Six big business conditions which are 80% of the world’s chocolate, Hershey, Mars, Philip Morris, Nestle, Cadbury, Ferrero. Europe consumes only about 40% per year in the world’s cocoa beans, with 85% of West African wine.

Competitors (source: sfu.ca)

Crime and Corruption

 I will wait to invest in an area with less crime and corruption. When you look at the website for the world’s most corrupt countries, according to an annual survey by Transparency International in Berlin that corruption is the use of public office for private purposes, is seen as among state politicians and other platforms. Worldwide only 183 countries included in the survey research in my country of choice is not among the top 20 (Source: ec.europa.eu). She is set to zero (highly corrupt) to 10 (low level of perceived corruption). Denmark, New Zealand and Sweden, get the best score of 9.3 in the bottom of the ratings list, Haiti Iraq are 1.8 and eventually Somalia, with a score of 1 (Source: Infoplease).

Country Agreement

with the idea of ​​making chocolate abroad, the country gives its approval to establish the activity of the cocoa plant in the country, due to lack of financial depth lacking in most African countries development and increased unemployment, I think that everyone try to create jobs for its citizens to contribute to the economic growth of the country itself. However, President Alassane Ouattara, who took office in 2011, has focused on economic reforms and infrastructure investments. The government also launched a major reform of the cocoa sector to ensure a minimum wage for farmers and encourage investment in aging plantations (Source: Yahoo News). Cocoa beans are coveted by contractors worldwide, but due to financial shortages in the country, the Board of Global Ventures Plc could invest in this sector and implement the cacao plant, first, that the country will never Have at it, makes the country to stimulate their economies, globalization enables the organization to increase profits and market size in some areas of the developing world, such as Africa and Asia, where wages n ‘Cheap is an example of what will be a British manufacturer Dyson in their business beyond Malaysia to maximize your profit and do not cost much more than the salaries of their employees. In the case of Malaysia allows the country to create employment opportunities for the local community and contribute to improving the economy (Source: P Wetherly 23). As for the Dyson scenario, developing countries may depend on international lenders and entrepreneurs to invest in their country. Some companies build international relations with supplier countries to secure their investment. With this investment, farmers are well paid because the company handles cases only acquires better pay, but also lead the country’s economic growth and reduce unemployment, improve the quality and style of life.

Structure of the Ivory Coast market

Ivory Coast has been in the oligopolistic market structure, because of its pre-colonial agreement, trying to understand the role played by the French government in the history of Ivory Coast, France has played a formative role in the development of the Costa Ivory in the cocoa sector in particular. This exploitation has existed since the creation of the nineteenth century colonial empire. at the beginning, during the twentieth century, cocoa became the most important export product of Ivory Coast. France manipulate the structure and traditions of Ivorian society to promote their own interests, the establishment of monocultures. The French began to expand cocoa production strictly in the 1930s and, finally, the development that took place in the cocoa sector of the Ivory Coast from 1930 to 1950 helped the economy of Ivory Coast in the wake of independence France in 1960. However, even in these moments of success, Côte d’Ivoire remained strongly influenced by France as France maintained control of the Ivorian society during the colonial era by establishing structural dependency and neo-empire remained through investment colonial and political manipulation, with more than 1,000 French companies and 147 subsidiaries registered in the economy of Ivory Coast, France remains the largest foreign investor in Côte d’Ivoire. Furthermore, France has significant investments in several key areas Ivorian society, such as automotive, where cars dominate the French market, communications, where the Ivorians more often buy mobile phones Orange TM (French company) and make Local phone calls from a company owned by France Telecom, electricity and water are a subsidiary of the French company Bouygues, water supply and that Air France has 51% airline Ivory Coast for these chains economy Ivory Coast, France also controls the banks and lending institutions in Côte d’Ivoire, which are all subsidiaries of French banks such as BNP Paribas and Crédit Lyonnais. Since independence in 1960, Côte d’Ivoire, French companies have used unfair contracts to repatriate 75% of the wealth produced there (source: DigitalCommons).

Protectionism

In Africa, 200 million people are undernourished, according to the United Nations Food and Agriculture. For years, African governments forced farmers to leave their crops to marketing boards administered by the State at prices below market. Some of these corrupt and inefficient institutions have been weakened or removed, but many other restrictions on agriculture remain, including tariffs on products and inputs, such as fertilizers and machinery. Analysts are obsessed with subsidies to farmers in rich countries, but sub-Saharan Africa’s agricultural exports, compared to an average rate of 33.6%, the highest of all regions of the Earth. The World Bank estimates that global free trade in all goods would add $ 287bn to world income each year, removing their own tariffs and quotas, which artificially restrict access to other markets, including their neighbors. High food prices are now a clear and immediate reason to cut tariffs, but that does not mean it will happen. For decades, protectionism has been imposed against the interests of local consumers because of the nature of a coalition against Western activists under the slogan “Make Trade Fair”, groups like Oxfam and Christian Aid urges the industry protection agriculture and local fees that may grow into or competitive with local consumers, especially the poor, who suffer from high prices. But decades of protectionism have done little for SSA. No wonder that the yields of crops such as income and life expectancy or have fallen in much of Africa since the 1980s (source: policynetwork).