Côte d’Ivoire: the energy crisis threatens the cocoa industry
Barely recovered from the negative effects of the economic crisis and the restrictions imposed by the multinationals, the cocoa industry is once again facing an umpteenth challenge: the power outages that have been affecting all Ivorian businesses and households since early May.
This situation seems absurd in light of the country’s recent past: Côte d’Ivoire, which has been experiencing a strong economic upturn for the past decade, exported 11 percent of its electricity production to six neighboring countries - Ghana, Togo, Benin, Burkina, Mali and Liberia - in 2020, according to the Ministry of Energy. But with low water levels in dams due to low rainfall and climate change limiting hydroelectric generation, and a shortage of natural gas supply limiting thermal generation, the entire energy infrastructure is now under pressure.
As a result, the wave of power cuts affecting Côte d’Ivoire is threatening the entire cocoa industry - the country’s largest export market - and in particular the cocoa grinders that process the beans. The Ivorian government had pledged this year to grind 50% of its production. This objective is now almost unattainable, in the opinion of the head of a local grinding company: « This situation is truly regrettable at a time when production has reached a commendable level. The losses caused by the reduction of our crushing capacity are high, » said our interlocutor. Worse, many grinding companies will suffer delays in deliveries but also significant losses for those who export processed cocoa beans. Some of them have already decided to reduce or even give up the production of cocoa butter.
For the month of May alone, the decline in grinding activity is expected to be around 40%, according to the Cocoa Council (CCC). Normally, 45,000 to 50,000 tons of cocoa are ground each month. A contraction that will also affect the state as a result, since this will mean fewer export taxes to collect. However, the national electricity company, CIE, predicts a return to normal in July, a period that coincides with the rainy season. To be continued…