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Cocoa Prices Remain Volatile Amid Climate Shocks and Forest Loss

The prices of cocoa have decreased since last year’s peak, but the industry continues to face challenges due to climate-related shocks and forest loss. The Food and Agriculture Organization of the United Nations has reported that agroforestry practices can help protect both supply and forests.

Cocoa is a rainfall-dependent crop grown mainly by smallholders in tropical regions. Its production is concentrated in a few key areas, making it vulnerable to climate extremes. In 2024, the Ivory Coast and Ghana, which produce nearly 60% of the world’s cocoa, were affected by extreme weather conditions, leading to a surge in prices.

The FAO has found that extreme heat can undermine agriculture, reducing crop yields and increasing pest and disease pressure. A recent study modeling cocoa under mid-century climate change suggests that warming could lead to the loss of up to half of today’s suitable cocoa area in some regions.

To address these challenges, researchers are exploring agroforestry practices that can help rebuild shade cover, improve soil health, and reduce cocoa’s exposure to heat and drought. These practices can stabilize farm conditions, support biodiversity, and produce higher-quality beans that meet premium market standards.

The implementation of climate-resilient agroforestry practices could provide a solution for the industry. By bringing trees back to cocoa farms and reversing damaging practices, farmers can maintain tree cover and reduce their reliance on monoculture farming. This approach has the potential to improve crop yields, support biodiversity, and promote sustainable cocoa production.

The FAO is working with stakeholders to develop and implement these practices, which could help mitigate the impact of climate change on the cocoa industry.

Source: Al Jazeera