Cocoa price rises to record highs should benefit farmers, yet conditions remain challenging
Cocoa in Ivory Coast, Cacao, La Cote D'Ivoire. Pic: ofi
As one of the biggest headlines of the week, news that cocoa prices have hit a 12-year high on the US commodity market in New York, you might imagine in theory, be good news for the farmers at the sharp end of harvesting these highly sought-after crops.
However, the present high prices of well over $3000 a tonne being paid on the ‘futures markets’ is in reality some distance from the sums being paid, or farm gate value that agricultural communities are ultimately receiving in core producing nations such as Ghana and neighbouring Ivory Coast.
What are the reasons for this seemingly very clear disparity? Well, the answer is not a straightforward one, with values for commodity trading being set on a rather different footing from physical stocks of cocoa – but there’s more than anything, being fairer to farmers in such situations is absolutely crucial to the future survival of the sector as we know it. The odds really are that high – as without the next generation of potential farmers embracing the industry to replace the ageing working population, the sector will completely dwindle.
At present, as the likes of Fairtrade and Oxfam have noted that the Covid-19 pandemic, and tough economy in its wake have taken its toll on many major supplying nations, with farmers in West Africa reportedly 16% worse off than in 2019, and with the cost of fertilisers and other agricultural inputs remaining high, they outlook remains uncertain.
This is a situation that many keen market observers based in Africa have already underlined, many times over, that without adequate investment, the industry will seriously struggle to be maintained in its present format, without major intervention from governments (who set prices in West Africa), companies – who have the ability to increase the price they pay for cocoa at source, and consumers themselves being willing to pay more than the fairly cheap price of chocolate that many European customers have enjoyed for decades.
But all that is starting to significantly change, as many confectionery companies have been forced to raise their prices (with confectionery suffering from around 20% inflation over the past couple of years due to the impacts of Brexit, and ingredients price hikes due to the ongoing war in Ukraine seriously impacting on established supply chains. This will be one of many issues that will come under the microscope at this year’s World Confectionery Conference, happening in Harrogate on 5 October, for which there’s still time to register.
So where lies the answer to all these issues? While community engagement schemes, and agroforestry and educational initiatives favoured by many big companies are very definitely welcome measures that boost the stability of communities, the issue of pay is at the heart of all this. But exactly who pays for that is still very much at the crux of the debate – to be very blunt about it, consumers, industry and governments must share that collective responsibility and all be willing to go that extra mile, as otherwise, those chocolate treats that many of us around the world more than likely take for granted, won’t be quite so readily available in the very near future.
Neill Barston, editor, Confectionery Production