The steepest dive in cocoa demand in a decade has thrown into jeopardy a plan by top producers Ivory Coast and Ghana to guarantee some two million farmers a living wage, sources within the countries’ regulators said.
Leading chocolate-makers agreed to a proposal from the African nations last year to charge the industry a premium for cocoa beans and guarantee a minimum income to farmers who earn just $1 a day.
But the scheme, set to come into effect this October, was based on expectations that international cocoa prices would stay within average ranges. Instead, the impact of the COVID-19 pandemic on demand has driven them to their lowest in nearly two years and they are expected to stay weak for at least a year, the industry says.
“It is not certain we will be able to guarantee farmers the amount originally expected,” a source at Ivory Coast’s cocoa regulator the Coffee and Cocoa Council (CCC), which sets the official farmer price each season, told Reuters.
The source, who declined to be named because he is not authorised to speak to the press, said the country’s cocoa sales for next season were some 30% below average levels for the time of year.
The CCC did not respond to Reuters’ requests for comment.
A spokesman for the Ghana Cocoa Board (Cocobod) said in a statement sent via WhatsApp the process of determining the price cocoa farmers will get was ongoing. He added, however, farmers would still get a better price than without any premium.
