The two largest cocoa growing countries, Ivory Coast and Ghana, have teamed together in the hopes of establishing a new price floor for cocoa. Together they produce over 60% of the global cocoa supply, and although the chocolate industry generates $10–20 billion in profit every year, Western African farmers see very little of this profit.
Nana Addo Dankwa Akufo-Addo, Ghana’s President, announced last month, “We will not continue to be victims or pawns of the global cocoa industry that is dependent on the work of our farmers.” It has been suggested that the two countries, who have been named cocoa-PEC (after oil producing countries, OPEC), will set a minimum price of $2,600 per ton of cocoa, which is about 10% above the world price at the time of announcement.
It is a move that the government hopes will boost farmers overall income, reduce child labour and give the farmers a more equitable share of the global chocolate profits. Moreover, Ivory Coast’s trade minister, Souleymane Diarrassouba, hopes the move will attract younger farmers to plant cocoa beans.
With the gradual fall of global cocoa prices over the last few years many Ivorian producers turned to more lucrative crops such as rubber, cashews, palm oil and cotton. “The next generation needs to be attracted to the industry,” said Souleymane Diarrassouba. “The more the price of cocoa rises, the more the farm workers will earn. There’s no chocolate without farmers.”
The Cocoa Barometer reported that farmers in Western Africa make just $0.78 per day, far below the living income level. They also estimated that over 2.2 million children still work on cocoa farms in Western Africa. Without a guaranteed price floor, farmers are incredibly vulnerable to any sudden drops in price.
Critics of the price floor are sceptical about whether the price per cocoa is enough to alleviate widespread poverty in Ghana and the Ivory Coast. Either way, it’s an important first step for these two countries who for too long been exploited at the hands of large multinational chocolate corporations.
In 2017, international market intelligence agency Mintel reported that India is amongst the fastest growing chocolate markets in the world.
The two largest cocoa growing countries, Ivory Coast and Ghana, have teamed together in the hopes of establishing a new price floor for cocoa.
A report by ResearchAndMarkets.com has forecasted the premium chocolate market in Europe to reach USD 13 billion by 2024, with an estimated compound annual growth rate (CAGR) of 8.66% over the next five years.