Last Updated on May 22, 2020 by kristina
The Cote d’Ivoire and Ghana, produce a whopping 60% of the world’s cocoa. Now they have formed a powerful coalition which some have referred to like the OPEC of Chocolate!
Similar to OPEC, whose control over crude oil output has mostly driven global oil prices since 1960, the replacement of a competitive landscape with a single controlling organisation is likely to raise the cost of chocolate bars and other sweets.
They have already announced prices will increase in October by 16% from $2,500USD per ton to $2,900, which has caused some concern and confusion in the industry, with trade valued at $107.3 billion annually.
Other providers might try to step in, but the consumer will likely bear the ultimate cost in the form of price rises. The new premium charge “is essentially a $1.2 billion tax on the cocoa industry,” said Eric Bergman, vice president at brokerage JSG Commodities Inc.
Others feel it is essential for sustainability to ensure farmers are paid fairly. “Cocoa farmers should be able to support their families and earn a decent standard of living, and we support the goal of raising farmer incomes,” said Jeff Beckman, spokesman for Hershey. The World Bank has stated that 80% of cocoa farmers, or four million people and their families, live on less than $3 a day. A statistic that has mostly stayed the same for years. While cocoa prices fluctuate on the international market, living costs for farmers have steadily risen.