Conseil café cacao (CCC), the regulator in Côte d’Ivoire, announced the new cocoa farmgate price on October 1st, and farmers are not pleased. The price is now 825 CFA ($1.45) per kilo, a discount of 18.5% from the previous year’s price of CFA 1,000, or ($1.77) per kilo.
In an earlier article, we wrote farmers were looking forward to hearing some good news from regulators after a promising harvest.
Now those hopes have been dashed, and they’re not the only ones upset.
Tony’s Chocolonely, the colourful Dutch chocolate company, calling for Slave free chocolate, made a satirical comment on their blog about chocolate being on ‘sale’.
Perhaps this shouldn’t come as a surprise. Remember, last years 1,000 CFA price was set during the presidential election. A time when promises might have been made freely in order to secure votes.
There has been tension between the major chocolate producers and the big chocolate companies, ever since the Living Income Differential was implemented. Several of the companies avoided paying the premium by buying cocoa from other sources, causing the countries to threaten to revoke their sustainability certificates.
The situation got ugly, and it hasn’t really improved. For the CCC to drop the price by this level is akin to raising a white flag of surrender. Someone has to blink first in a game of chicken, and this time, it was Côte d’Ivoire.
Mr Kone, the CEO of CCC, said last week that the LID is here to stay, so get used to it. However, that statement now seems hollow in light of the new farmgate pricing. The LID may still be included technically, but the farmers’ living standards will decline.
Combined with the outbreak of black pod disease, it’s once again going to be a difficult time for cocoa farmers in Côte d’Ivoire
It appears that it is not the chocolate companies that need Côte d’Ivoire, it is Côte d’Ivoire that needs the chocolate companies. Hard dollar currency, which the country depends on, is imported through cocoa sales, and chocolate companies know it.
The industry has shown that it cannot self regulate. The cost to the participating companies is easily digested, but if done in isolation, becomes a competitive disadvantage. Regulation is needed to force a level playing field.