With ever more volatile prices, coordinating sales and setting a floor price may help to level the playing field
The stark reality of the cocoa market was laid bare in 2014 when Dutch journalists visited farmers in Côte d’Ivoire and found they had never tasted chocolate. They didn’t know what the cocoa beans they grew were used for, and were astounded when given chocolate to try.
Côte d’Ivoire produces the most cocoa, followed by Ghana – together, they produce around 70% of the global supply, says the International Cocoa Organization (ICCO), with Indonesia the third biggest supplier. Yet, chocolate was invented in Latin America, taken to Europe by Spanish explorer Cortes.
Worldwide production in 2015-16 reached 3.997m tonnes, growing to 4.744m tonnes the next year and 4.587m tonnes predicted for 2017-18.
While global retail chocolate sales totalled $98.2bn in 2016, up on $93.7bn in 2015, according to Statista, cocoa growers receive just 6.6% of the value of each tonne of cocoa sold, says the Make Chocolate Fair campaign, organised by German NGO INKOTA.
But corporate efforts to level the playing field have had little effect, according to the 2018 Cocoa Barometer, from a consortium of NGOs. Growers in Côte d’Ivoire saw their income drop by 36% in one year.
The Barometer said the sustainability efforts of firms, mostly improving farming practices, have little impact against a backdrop of volatile cocoa prices.
Cocoa averaged $3,140 a tonne in 2015, $2,890 in 2016 and $2,030 in 2017, according to the World Bank.
In an attempt to gain some control of the market, Ghana and Côte d’Ivoire plan to coordinate sales of beans, organising what volumes of cocoa go to market and setting a floor price. They also want more of the crop to be processed locally and will build warehouses to store surplus beans. Spending on marketing will increase to boost consumption of chocolate in the region, said Bloomberg.