The Bittersweet Truth Behind Rising Cocoa Prices: How High Profits Leave Farmers Behind
Cocoa prices have experienced a significant increase in the past few months, with the price of a ton of cocoa rising from $2,500 to over $10,000. This has led to an expected hike in prices in the chocolate industry, with retailers facing empty warehouses as they had previously secured cocoa at lower prices.
Supermarkets are already feeling the effects of the rising cocoa prices, with some experiencing shortages of popular chocolate brands due to price negotiations with companies like Mondelez and Lindt & Sprüngli. Despite the high prices, farmers in key producing countries like Ghana and Ivory Coast have not benefitted significantly from the price increases as governments regulate cocoa prices.
Farmers in these regions are receiving substantially lower prices compared to current market rates. Climate change has also impacted cocoa cultivation, leading to lower harvest yields and further exacerbating the price hikes. The current situation is leading to widespread smuggling of cocoa, disrupting supply chains and contractual agreements.
Fairtrade is working to support cocoa farmers through guaranteed minimum prices and premiums to invest in sustainable farming practices. In Austria, Fairtrade sales have remained resilient despite price increases, indicating a growing preference for sustainable products in the market. In 2023, Fairtrade products generated sales of 663 million euros in Austria, with significant increases seen in categories like orange juice and cocoa beans.
