Cocoa supply chains stand at a crossroads of whether industry will pay present market prices
Fresh cocoa fruit in cocoa factory
This week, the chocolate confectionery supply chain stands at a fundamental crossroads in terms of whether the industry is willing to engage with higher prices for its cocoa supply chains.
The present reported situation of a stand-off between major chocolate groups and buyers, who are seemingly unwilling to pay the current increased rates, is not a scenario that is sustainable for the long-term viability of the global industry.
As the Voice Network sector NGO has noted, the apparent reluctance of confectionery and cocoa companies to pay the going rate for prices on the commodity market (which are admittedly at a significant high), represents nothing less than an approach of what it described as double standards. As the organisation noted, the sector has been quick to state it is unable to positively influence prices when they’ve been historically low for many years, yet when they’ve risen, the industry, according to analysts close to the market, has been seeking to lobby prices downwards and hold back from buying key supplies for the 2023/24 season.
Why does this matter so much? Well, the comparatively high rate of cocoa prices that we’re now seeing is in fact down to a couple of key issues – poor weather impacting yields, as well as inflated costs for farmers in terms of their agricultural inputs including fertilisers, as well as wider supply chain uncertainties.
So, now that prices have in fact risen to a level nearing what might be considered by many observers as a living wage, it appears the industry is unwilling to in fact enable farmers to benefit from that directly. Anyone who has spent any time seeing this cycle of events evolve and repeat will know that something major has to change. The model and practices of buying cocoa simply have to be adapted if the efforts of the industry to engage with sustainability are to have genuine credibility.
With many troubling global events playing out around the world including the ongoing conflict in Ukraine, as well as latest warfare in Israel and Gaza, issues of farmer poverty are seemingly relatively low down the global news agenda. But for those at the heart of the industry, the agricultural communities themselves, this really is about ensuring their future, so we can only hope that the industry, together with governments in core farming territories of Ghana and Ivory Coast (which have made some promising steps with pay rises for farmers last month), can acknowledge that meeting market prices as they are is the only way forward for future of the industry.
Neill Barston, editor, Confectionery Production
- Keep in touch at [email protected] or via social media: @confectionprod
