EXPORT COMPETITIVENESS OF WORLD MAJOR COCOA PRODUCERS IN THE CONTEXT OF SANITARY AND PHYTOSANITARY STANDARDS

Abstract

Sanitary and Phytosanitary (SPS) standards in agricultural trade have witnessed increased usage as a result of health and environmental concerns. Increasing stringency and multiplicity of the standards by importing countries limit true competitiveness of cocoa export. Previous studies have assessed competitiveness from non-quality factors which masks the reality of global awareness on food quality and safety. Hence, export competitiveness of world major cocoa producers in the context of SPS standards were investigated. Secondary data covering 2005-2016 were sourced from International Trade Centre, FAOSTAT, World Bank and Homologa Agrobase-Logigram for the five major cocoa producing countries (Cote d’Ivoire, Ghana, Indonesia, Nigeria, Cameroun) and 19 main importing countries (10 from the EU: Belgium, Estonia, France, Germany, Italy, Netherlands, Poland, Spain, Switzerland, UK and nine from other parts of the world: The US, Canada, Brazil, Russia, Malaysia, Japan, China, Thailand, Singapore). Data used were value of cocoa trade, importer Gross Domestic Product (GDP) per capita, distance between trade partners, cocoa productivity and exporter GDP per capita. Value of trade and GDPs per capita were in million (m) dollars. Stringency Indices (quality measures) in EU Trade-EUT (STIeu) and World Trade-WT (STIw) were generated from number and maximum residue levels of regulated pesticides in addition to commonly-used pesticides on cocoa beans in exporting countries. Competitiveness Scores (CS) were generated from individual standard trade values, Codex trade losses in the absence of harmonisation and percentage changes from Codex trade values. Data were analysed using descriptive statistics and panel Poisson Pseudo-Maximum Likelihood regression within gravity model context at α0.05. Cocoa trades were $63,287.23±136,769.60 and $52,074.01±121,161.80, importer GDPs per capitawere $39,763.35±17,901.54 and $32,907.17±20,203.70 and distances were 6,184.62±2,571.30 km and 7,709.05±3,466.30 km for EUT and WT, respectively. Cocoa productivity in exporting countries was 0.45±0.13 tonnes/ha, while exporter GDP per capita was $1,811.07±974.30. Stringency was stricter for EUT (STIeu=0.6373±0.2990) than WT (STIw=0.4297±0.3513). Stringency indices had significant effect on trades for EUT (β=0.0365) and WT (β=0.0658). The STIeu trades were $181.69m, $95.55m, $1.97m, $47.15m and $27.85m, while trade losses were $440.07m, $272.75m, $3.69m, $159.07m and $151.16m for Cote d’Ivoire, Ghana, Indonesia, Nigeria and Cameroun, respectively when standards were not harmonised. This represented -70.8, -74.1, -65.2, -77.1 and -84.4% changes from Codex values. The STIw trades iv were $1,800.00m, $554.56m, $288.20m, $231.30m and $103.08m, with losses of $100.00m, $361.89m, $141.44m, $242.21m and $256.75m, while percentage changes were 5.9, -39.5, -32.9, -51.2 and -71.4% for Cote d’Ivoire, Ghana, Indonesia, Nigeria and Cameroun, respectively. The CS were 0.33, 0.30, 0.17, 0.27 and 0.25 for EUT, while they were 1.49, 0.33, 0.21, 0.25 and 0.27 for WT in Cote d’Ivoire, Ghana, Indonesia, Nigeria and Cameroun, respectively. Average trades of the exporting countries were $630.44m, $321.19m, $169.93m, $134.71m and $108.83m, while average CS were 0.91, 0.32, 0.26, 0.26 and 0.19 for Cote d’Ivoire, Ghana, Nigeria, Cameroun and Indonesia, respectively. The major cocoa producing countries with high trades, despite stringent sanitary and phytosanitary standards, were more competitive.

Keywords: Codex trade, Pesticides regulation, Standard harmonisation, Stringency indices Word count: 480