Low cocoa prices pose ‘serious consequences for long-term supply of chocolate’, warns Fairtrade

Cocoa futures dipped to an eight-month low this week as the market struggled to absorb excess supplies following bumper harvests in top growers Ivory Coast and Ghana and on top of weakened consumer demand for chocolate through the pandemic.

The price drop is causing grave concern amongst farmers, Fairtrade International, which reports that some producers are making less than $1 a day on average. “With chronically low incomes they are living in poverty and are unable to pay for essentials like food, send their children to school or pay for healthcare if they fall sick,”​ the group warned, adding “​the bitter truth is that low cocoa prices, the continuing impacts of the Covid-19 pandemic and rising global temperatures mean that farmers don’t have the resources to withstand the shocks they face. This undermines their ongoing efforts to escape poverty and has serious consequences for the long-term supply of chocolate.”​ 

The warnings came as the group, which owns the Fairtrade sustainability label and represents 1.7 million small-scale farmers and workers worldwide, published research into the living standards of cocoa farming families shows that on average, Fairtrade boosts farmers’ spending on household essentials beyond the need for food by 9%. For households living below the international poverty line of $3.20 a day, this figure jumps up to 14%, meaning poorer families are able to invest more in the pockets of Fairtrade farmers to spend as they choose. 

The 2021 study, ‘Effects of Fairtrade on farm household food security and living standards: Insights from Côte d’Ivoire’​ by Isabel Knöβlsdorfer et al. from the University of Goettingen in Germany and collaborators, analysed data from 500 randomly selected Ivorian cocoa farming households. They were evenly split between Fairtrade and non-Fairtrade certified co-operative members.