Evaluate whether cocoa farmers should be planting new cocoa trees from 2014.

I believe that farmers should plant new cocoa trees. This is because it has been forecasted
that cocoa beans will be in high demand within the next few years, and supply is supposed
to decrease. This means that there will be a gap in the market, which could be very
profitable for farmers. The reason supply is decreasing is because growing cocoa bean s
require specific weather. Lately, places that grow cocoa trees, such as Ivory Coast, have
been getting a lot of dry weather and no rain. This has made it difficult to grow and harvest
them. However, India and China have been rapidly increasing their production of cocoa
beans. Although this would help fill the gap the supply, there won’t be enough to fully
satisfy everyone. Cocoa beans are an inelastic good, which means that even if supply goes
down, demand will keep increasing over the years. Everyone around the world wants cocoa
beans. The reasons farmers should plant cocoa trees is because the weather is bound to be
better soon so they would be able to grow cocoa trees without facing natural problems. In a
few years’ time demand will still be the same, if not higher. So, farmers will be still be able
to sell all their stock.
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There are also many reasons why farmers should not plant cocoa trees. As stated in the
case-study, cocoa trees take up to 4-5 years to fully grow. The market could have changed
by then ad cocoa trees may not be in demand as much as it is now. Since cocoa trees do not
sell for much, the farmers would not make a lot of profit from them and would have wasted
an enormous amount of time growing them. Furthermore, we see that demand is increasing
in emerging economies. India and China are the main countries where this rise in demand
occurred. Due to this, they have increased their production of cocoa trees significantly.
Increasing their production means that they will eventually start selling their product
internationally, and since their supply is so high, the prices they charge will not be high.
Since farmers have to grow the cocoa trees themselves, they would charge higher prices as
otherwise they will not be making any profit. In addition to this, the weather is a major
factor is this. If there were too be very dry weather for the next few years, it would be very
difficult to actually grow. Likewise, if the weather was too be stormy for the next few years,
which is unlikely but could still happen, the crops would just get ruined and the farmers
would lose out on those profits.
Overall, I believe that farmers should not plant new cocoa trees due to the fact that it is
unlikely that they will be able to maximise profits based on what we have seen. Such the
emerging countries which has a rising demand, and the unpredictable weather patterns.
Planting cocoa trees would be a gamble as we are unsure of what the market for cocoa
beans will be like in 4-5 years as that is how long it takes to grow cocoa trees. Although
there are some benefits to planting them, it is just too risky as they could lose out on a lot of
profit. They are better off investing in other crops.