“Premium Cocoa or Premium Problem? The hidden & unseen competition between Ghana & Ivory Coast Cocoa Sectors

In 2016, I was managing a cocoa processing factory project, and one of the primary requirements from our key funders was to secure an alternative source of cocoa beans in case Ghana’s beans became too competitive or difficult to obtain. The funders valued Ghana’s premium-quality beans and found the incentives provided by the Ghana Free Zones Board, along with the discounted light-crop beans, to be compelling reasons to establish factories in the country. However, we anticipated that there could be instances where Ghana’s bean supply might face deficits or market challenges, making it necessary to ensure the factory could operate without disruption.

To explore alternative sources, I visited the Ivorian embassy in Ghana to inquire about trade agreements and the possibility of procuring cocoa beans from the Ivory Coast. To my surprise, I was informed that Ivory Coast does not allow the export of its beans to Ghana. Perplexed, I asked whether there were geopolitical tensions or historical grievances affecting trade between the two countries that I was ignorant about. After further probing, the embassy officials explained that both Ghana and Ivory Coast, being the world’s top cocoa producers, have a mutual policy prohibiting the import of each other’s beans.

The rationale provided was that since both countries are positioned at the supply end of the cocoa value chain, allowing cross-border imports of beans could create pricing vulnerabilities. For instance, if Ghana’s bean prices increase due to reduced production quantities, Ivorian producers might be motivated to export their beans to Ghana to take advantage of the increased price. This scenario would disrupt Ghana’s internal market, as the Ghana Cocoa Board (COCOBOD) might struggle to sell all the beans it had procured from farmers. Conversely, if Ivory Coast experienced a deficit, a similar situation could arise, leading to instability in both markets.

Despite understanding their explanation, I remained unsettled. The logic seemed flawed when viewed from a broader perspective. Seeking further clarity, I began exploring theories that might help explain the situation. One theory that stood out was the concept of economic nationalism, which posits that nations prioritise their own economic interests by imposing restrictions that protect domestic industries from external competition. In this context, both Ghana and Ivory Coast might be enacting policies rooted in economic nationalism to safeguard their cocoa industries and prevent external forces from manipulating their markets.

While this approach might offer short-term protection, it inadvertently perpetuates division and limits potential collaborative gains. Chocolatiers, predominantly based outside these two countries, face no such restrictions. They can buy beans from both Ghana and Ivory Coast, blend them as needed, and create unique chocolate recipes without any trade barriers. First of all the brand we sort to protect becomes useless as it’s blended into manufacturing chocolates that are difficult to find its bans origin. Because frankly, eaters of chocolate don’t really care if the chocolate is made from Ghanai beans or Ivorian beans. This freedom contrasts sharply with the rigid trade policies imposed between the two largest cocoa producers.

Ghana’s stance on protecting its premium-quality beans became clearer when I engaged further with COCOBOD. They emphasised that Ghana’s reputation for producing high-quality cocoa commands a premium price in the global market. Allowing the import of Ivorian beans could dilute this reputation. If buyers discovered that the beans marketed as Ghanaian-produced beans included Ivorian beans, it could undermine the perceived quality and, by extension, the premium pricing Ghana enjoys.

While I understood COCOBOD’s concerns, I couldn’t help but critically reflect on the broader implications of this policy. The so-called “premium badge” which, by the way, adds less than $100 per metric ton—has done more than build Ghana’s brand. It has inadvertently fostered a geopolitical rift between two countries that share similar challenges: reliance on cocoa production and the persistent poverty of their smallholder farmers. Instead of collaborating to address common issues such as low farmer incomes and environmental degradation, Ghana and Ivory Coast have become competitors.