How high gold prices are fueling a chocolate shortage
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Lately, the price of gold has been exploding. The price of the precious yellow metal on the rise. Gold made history, smashing record highs. Prices for the precious metal briefly topped $3,000 an ounce today for the first time. And this increase has a lot to do with what's happening around the world. U.S. President Donald Trump's tariff threats, geopolitical tensions...

It's making investors want to put their money somewhere secure. So whenever things are really uncertain, people don't know what's going to happen next, they tend to move their money into gold. Gold is what's known as a safe haven asset. It's because, you know, it's never going to go too crazy. If you're an investor and you're investing in stocks of a company, that could suddenly tank because the company is hit by tariffs or some other legislative change. Whereas gold is always going to be gold.

But as more investors pile into gold and push the price up even higher, that's leading to some unexpected consequences. Let's consider a country like Ghana. It's one of the world's largest producers of gold. So you'd think this news would be good for the people living there.

But this demand is actually impacting another super important commodity. Ghana produces a lot of gold, but it also produces a lot of cocoa. Cocoa is the key ingredient in making chocolate. And these two are linked.

The two commodities are pretty much in competition in a way. And so if you want to take gold from the ground, you're essentially going to have to destroy farmlands that are used to grow cocoa and other crops in Ghana. I'm Michaela Tendera from the Financial Times. Ghana's economy is propelled by commodities. It's the world's second largest producer of cocoa beans.

And it's also a major exporter of gold. Today on Behind the Money, we're going to be exploring how investing in a safe haven asset is making a lot of things in Ghana's economy quite insecure. It's playing a role in environmental destruction and putting a squeeze on the already struggling cocoa industry. Ghana has long been known for its gold deposits. During colonial times, the British called it the Gold Coast.

But in more recent times, as the price of gold has ticked up and up, this sector has become even more appealing. Ghana has always had loads of gold. People have always worked in the industry. But now that you have global uncertainty, it makes it even more enticing to people who want to engage in the trade. That's CFT's West and Central Africa correspondent, Anu Adeoye.

He lives in Lagos, Nigeria. And he recently took a trip to Ghana to see for himself just how attractive the trades become for the people living there. I remember that day so well because I had to wake up at 5 a.m. for a 7 a.m. flight to Ghana. It's not a long flight by any means. It takes about 50 minutes to fly from Lagos to Ghana's capital, Accra. And if your pilot really steps on the gas, it could be done in 40, 50 minutes.

From Accra, Anu rented a car and went for a three-hour-long bumpy ride to see some mining towns. They're rural, very rural villages. They have just one main road running through both places.

When he got there, he told me that he noticed how gold mining's effects on the area were impossible to miss. There were loads of farmlands, just land that had been dug up using excavators. You could also see that a lot of them had been flooded with water. And so if you go around, you know, the villages I went to, you see that the main bodies of water had turned brown. Anu's describing one of the main issues with gold mining in Ghana —

There can be loads of environmental destruction. The mining's often done illegally, without the proper licenses and permits from the government. I remember going to see Birim River, which is one of the main rivers in Ghana. And when I went to see it, it was a sight for sore eyes. You know, it was basically like a chocolate drink, you know, with the color it had on.

Miners use heavy-duty excavators to break up the soil. Then they flush it with loads of water and chemicals like mercury. People then pan for gold in the polluted water. It is incredibly destructive. It's terrible for water bodies in Ghana. There are experts who think that Ghana might have to start importing water as soon as 2030, which is only five years away.

So this surge in demand for gold is intensifying miners' impact on Ghana's environment. But there's more. Anu also learned that some of the people who are doing this illegal mining have ended up here more out of circumstance than because they actually want to be spending their time hunting for precious metals. So I met a 32-year-old man in Osino, which is a gold rush town in Ghana's east.

This man that Anu spoke with used to work in construction as a carpenter. He told me he was part of the many people who worked on building the new building for the Bank of Ghana, which is Ghana's central bank in the capital, Accra. But because of inflation pressures and the pressures of taking care of his kid and two younger siblings, he had to quit those jobs because he wasn't making a lot of money. He switched to illegal gold mining, scavenging with five others.

By doing this kind of work, he's risking being arrested by the police. But it's a chance that he and others are willing to take.

unemployment among young people in Ghana is high, so their options to make money can be quite limited. So he said, I was afraid when I started, but you can't steal and you have to work, otherwise hunger will kill you. So, you know, his take on the matter is, look, I need to work. I have people to take care of and I have all of these responsibilities. And, you know, what's the alternative? As gold prices reach record highs, it seems unlikely that this trade will slow down.

And that's a problem for another important Ghanaian export, cocoa. You see, for the last few years, cocoa production in Ghana has been struggling. Last year, yields plunged 20 percent. The cocoa industry is in crisis. Now, it's kind of a perfect storm. There's a whole cluster of problems hitting cocoa farmers.

That's CFT's commodities correspondent, Susanna Savage. She's been reporting on this with Anu. Weather patterns have changed and this has made it harder to grow cocoa. On top of that, there's been chronic underinvestment in cocoa plantations. The trees tend to be very old and that makes them more vulnerable to climate change. It also makes them more vulnerable to disease. And in the last year or so, we've seen an outbreak of a couple of diseases affecting cocoa trees, which

which all of this has had a really big impact on yields. This decline in production has already made its way to the chocolate makers. Maybe you've even noticed that the price of your favorite candy bar has gone up or gotten smaller. But back in Ghana, throwing the cocoa industry even more into a spiral is gold miners' interest in the land. It turns out cocoa farms and gold deposits are often found in the same place.

So both of them are very crucial to Ghana's economy, right? But unfortunately, both of them overlap most of the land that people used to farm. You can also find a lot of gold buried underneath. This practice of destroying farmland to access gold is upending the lives of Ghanaian farmers and their industry.

Anu met with one young farmer while he was out reporting who experienced this firsthand. So I met Isaac Springprunk. He's 31 years old. He's a farmer. And after working in the trade for about a decade, he had designed himself on starting his own farm. It took Isaac an entire year to cobble together enough money to make a deposit on the land he wanted.

But then... When he got to the land he had paid for, he realized that the illegal gold miners had taken over his land. You know, they had started mining activities. Illegal miners completely dug out Isaac's farm and flooded it to try to get their hands on the gold.

Isaac told Anu the land is now totally unusable. And the way he told me, you know, he almost came to blows with the guys he found on the land. Then he went to meet the person who has rented the land from saying, what's going on with this? You know, I paid you and I expected the land to be in pristine condition. Now, in Isaac's case, poachers effectively stole his land. But something else is happening, too.

Anu also heard about how illegal gold miners are offering lump sum payments to farmers to quote unquote borrow their farmland to search for gold. They usually promise the people who own the land that when we're done taking the gold from the land, we are going to rejuvenate it. Right. But that's just like, it's not possible. But if you go there, you just see like, even if they try their best, it just becomes like a wasteland eventually. Like this is impossible.

Picture this, you're halfway through a DIY car fix, tools scattered everywhere, and boom, you realise you're missing a part. It's okay, because you know whatever it is, it's on eBay. They've got everything, brakes, headlights, cold air intakes, whatever you need, and it's guaranteed to fit, which means no more crossing your fingers and hoping you ordered the right thing. All the parts you need at prices you'll love, guaranteed to fit every time. eBay, things people love.

So we've gone through how the demand for gold is affecting the cocoa industry, which already has its own problems. But when I talked with Susanna about how all this fits together, she told me that there's another factor that complicates this picture even more. I've been following the boom in cocoa prices for the last year or so, maybe a bit longer. And prices of cocoa have just gone through the roof. Now, a quick supply and demand refresher.

When the supply of a product like cocoa falls and demand remains steady, then the price of the product is supposed to go up. So you might think that these high prices would be good for cocoa producers, that the money would trickle down to them and keep them from selling their land to gold miners. But for Ghanaian farmers, there's something standing in the way.

And that's this Ghanaian government agency called Cocobod. So in order to shield cocoa farmers from the volatility of global markets when prices can, you know, they can go really low, the Ghanaian government set up a body called Cocobod, which tries to set the price for farmers to avoid them experiencing those real lows. And it's not so transparent how it sets that price. So

It can often seem very disjointed from market prices, which are much, much higher. So in the last year or so, you've seen farmers being paid around a third of what the market value of cocoa is because you have this body setting the price. So even when cocoa futures are trading at $10,000, $12,000 a ton, cocoa farmers in Ghana aren't getting more than $3,000. Okay, got it. So what farmers are making isn't lining up with market prices.

So where's the disconnect coming from? Yeah, there's a real lack of transparency about this. But Cocoaboard ostensibly provides services like spraying pesticides on plantations, providing fertilizers, things such as this. Farmers I've spoken to in the past have said that often these services don't materialize and

And so they're not quite sure where the money is going, but they're getting paid a lot less than what they see as the market price for cocoa. So they're not able to reinvest in their plantations and they're not able to increase their wages. You know, they're still earning very little and it's really hard to make a living. So then when someone comes and offers you a lump sum to be able to mine your land for gold, that's very attractive. All right, let's recap here.

Higher gold prices are making the illegal gold mining trade in Ghana even more appealing. As more people turn to gold, that's leading to the destruction of cocoa farmland, which is in turn hurting the Ghanaian cocoa sector even more. Now, there's a lot of factors playing into all this. And these problems in the short term at least seem to only be getting worse. Farmers are making less money. More and more land is being dug up for gold.

Ghana might have to start importing water. So I wanted to ask Susanna and Anu if they've seen any possible ways to break this chain as they've been reporting on all this.

So you mentioned that the cocoa bod is a government-controlled body in Ghana. So what can Ghana do to maybe bring some more stability to the cocoa industry? There's a lot of calls in the cocoa industry for there to be a complete overhaul of how this system works.

in order for market prices to filter through to farmers more directly and more quickly. So that would mean that this price setting mechanism that CocoaBot has would have to completely change. Some people also call for them to just revert to a free market model. And it remains to be seen how CocoaBot is going to react to this.

Okay. So changing the way prices are set certainly sounds like that could have an impact on the cocoa farmers. Now, Anu, what do you think? I mean, it seems to me like doing something about all of the illegal gold mining that's happening might help save what's left of the cocoa farmland.

Do you know if there's anything being done on that end? Yeah, that's a good question. You know, Ghana's new president, he has come into office promising to clamp down on illegal gold mining. I asked his office many times for what the plan is. They did not...

come back with any answers. It's the Ghanaian press have also been trying to, you know, pin them down on what the plan is. They haven't come out with any plan that we're aware of. We're all asking the government questions, you know, what are you going to do about this? Because it's essential to get a handle on this, right? Because not only is illegal gold mining terrible for

Farming, as we've said, is terrible for water bodies in Ghana. There's also the fact that it's terrible for the government because the government doesn't get the cuts from the taxes. These illegal gold miners are not paying any royalties to the government when they mine the gold. Companies with licenses have to pay taxes to the government. And so it means that the government is also missing out on this bonanza as gold prices reach record highs because the people who are

taking a slice of the gold and not paying any taxes to the government. So what happens if they don't get a handle on this? If the president doesn't get a plan together? If Ghana doesn't get a handle on the situation, it's going to affect their standing as one of the world's biggest cocoa producers.

And if for another two, three, four or five years, they can't grow enough cocoa, they will lose their place in the world, you know, to countries who are eager to get a bite of the sweet, sweet cocoa money, right? Yeah. And for example, the amount of cocoa being produced in Ecuador and Brazil and Colombia is increasing. And...

If Ghana doesn't make changes, the question is, will it be able to keep up or will it lose its spot as the second biggest cocoa producer in the world?

I mean, I wonder, you know, investors making decisions maybe in the United States, in the UK, wherever, they're seeing geopolitical tensions. And as we mentioned, like Trump's tariff threats, and they're just sort of thinking, OK, how can I protect my investments? I'm going to invest in gold. I'm going to buy gold. And

How this trickles out to people living in Ghana. I'm curious, just what do you think this tells us about how investment decisions in one part of the world can impact another? How do you think about that? Yeah, I mean, there's always been this tension about extractive industries, right? You take...

something from the ground in Nigeria or in Ghana or in South Africa or whatever, you know, you ferry it out elsewhere, you add value on top of it and you can sell it for multiples of what it costs to take it out of the ground, right? There's always been this tension. And I think what this shows us is that a lot of these systems are untenable. I don't think it's a new idea to say that at their worst cases can be very capricious. They can be very terrible for people in those communities, you

But I think it also shows us kind of this, the way the world is interconnected. So, you know, a president signs an executive order somewhere threatening to impose tariffs on their neighbors and the price of gold rises. Someone in a village in Ghana obviously sees the news that, you know, the price of gold is going up. They want to be

be a part of this gold rush. And so, you know, I think for me, the takeaway lesson is how interconnected the world is. You know, these things never happen in a vacuum. And Oliver,

And all of this has real life consequences, right? You know, when cocoa prices go through the roof, that has an impact all through that supply chain. And it's the same with gold. When investors make a big decision to move a lot of money from stocks and shares into gold, that also has a real life impact. It pushes up that price and that changes incentives on the ground in places like Ghana. Behind the Money is hosted by me, Michaela Tendera.

It's produced by me, Safiya Ahmed, and Katya Kumkova. Sound design and mixing by Sam Giovinko and Joseph Salcedo. Original music is by Hannes Brown. Topher Forges is our executive producer. Cheryl Brumley is the global head of audio. Thanks for listening. See you next week.