21 March 2024, Jon Walker, Fairtrade International Senior Advisor for Cocoa said:
“While high prices may seem like a windfall for farmers, once they eventually filter through to the farmgate, the underlying causes are worrying. The drastic increase is the result of a drop in supply, triggered by crop loss due to disease, climate change, and likely the increases in the costs of production and living for farmers due to crippling inflation.
“Fairtrade has long maintained that the cycle of boom and bust pricing is unsustainable for smallholder farmers, who need more stability in their livelihoods in order to invest in their farms and adapt to climate change. Higher prices offset by lower productivity simply perpetuates the income insecurity that keeps farmers trapped in poverty and threatens the future of cocoa.
“It remains to be seen if supply will bounce back, or whether the current trend will be longer-lasting. New regulations being rolled out and debated in Europe – such as on deforestation and corporate due diligence – are much needed but will also increase costs for producers as well as companies in unknown ways.
“To make progress on environmental and living income goals, stable minimum prices and long-term contracts between buyers and cocoa producers are necessary. Strong partnerships and co-investment will be key to weathering the current price shocks and building more sustainable cocoa livelihoods and supply chains.”
ENDS