Major cocoa producers in Cote d’Ivoire and Ghana must control supplies and partner with other producing countries if they want higher prices, said the head of the International Cocoa Organization (ICCO).
Speaking at the sustainable cocoa conference, Michel Arrion said Côte d’Ivoire and Ghana have recently recognized the need to control cocoa supplies, but could be ruined if other producers increase production.
Côte d’Ivoire and Ghana, with 65% of world production, are still price takers. If they were 90%, they would not be price takers, so we need more producers (on board).Michel Arrion
The head of the intergovernmental organization said that to this end, he would seek to bring other producers, as well as consumers in Asia and the United States, to join the cocoa dialogue recently launched by the European Union with Ghana and Cote d’Ivoire.
Cocoa producers in Côte d’Ivoire and Ghana
Cocoa production in West Africa
The world cocoa market is expected to record a surplus of more than 200,000 tons this season, with production in Côte d’Ivoire and Ghana set to grow and demand still under pressure from the coronavirus pandemic.
In an effort to alleviate farmer poverty, Côte d’Ivoire and Ghana have added a fixed “living income” premium to their cocoa sales, but their efforts have not been entirely successful and they have been forced to offset this premium by reducing other parts of their selling price.
In addition, producers such as Nigeria, Cameroon and Ecuador do not participate in the program, so their cocoa is both cheaper than that of the best producers and plentiful in the face of global supply surpluses.
The cocoa sector continues to be marked by widespread ethical abuses, such as child labor and deforestation, despite years of efforts by industry, government and civil society to produce the chocolate ingredient in a sustainable manner.
Although agricultural commodity prices have recovered this year with hopes of economic recovery, cocoa prices have changed little. According to Michel, the sector will never be sustainable without higher prices.
The EU launched its cocoa dialogue with Côte d’Ivoire and Ghana this year in anticipation of the introduction of due diligence laws to prevent the import of commodities such as cocoa linked to deforestation and human rights violations.
These laws could come into force as early as 2024, requiring companies and producing countries to clean up their supply chains.