The world’s leading Cocoa producers have announced that they will effectively raise the price of Cocoa from their respective countries by no longer accepting negative premiums, which they have been forced to do recently.
Cocoa farmers in Côte d’Ivoire and Ghana have always struggled to earn a dignified living wage from Cocoa production, despite being the largest producers of the key commodity for chocolate products.
In 2019, chocolate companies agreed to pay a Living Income Differential (LID) of $400 per tonne of Cocoa to help farmers secure higher incomes in the top producing countries.
There are now concerns, however, that negative origin differentials (an additional premium paid for a country’s bean quality) are cancelling out the LID, undoing efforts to combat farmer poverty.
Ghana’s Cocoa Regulators, COCOBOD, has announced it will be raising its origin differential from a negative £50 ($60) per tonne in July to a positive £20 ($24) per tonne in August.
Meanwhile, the Coffee and Cocoa Council (CCC) in Côte d’Ivoire has said it will raise its differential from negative £125 ($151) per tonne to zero in the same period. Ghana is able to command higher prices as they produce Cocoa of higher quality compared with Côte d’Ivoire, which produces a greater volume of beans.
As part of the Côte d’Ivoire-Ghana Cocoa Initiative (CIGCI), the West African countries said they will jointly publish their origin differentials each month.
Our ambition is to no longer sell Cocoa with a negative premium. It is to ensure that our producers receive a decent and remunerative income for their Cocoa, and to achieve this, the origin differential must once again be positive and the LID also applied…We will therefore no longer accept Cocoa sold below this level as we move into positive territory.
Alex Assanvo, Executive Secretary, CIGCI
