Fairtrade today welcomed the announcement by the governments of Côte d’Ivoire and Ghana to implement a floor price for cocoa of US$2,600 per metric ton. Farmers in the two countries, which together produce more than 60 percent of the world’s cocoa supply, have been hit hard by a collapse in cocoa prices in 2017.
“We believe in sharing the benefits of trade more equally, and welcome this move by the governments to shore up cocoa farmers’ incomes” said Jon Walker, Fairtrade International’s Senior Advisor for Cocoa.
“We will be actively engaging with the cocoa regulatory bodies in each country to understand how the Fairtrade structure, including our minimum price, will fit in with their plan.”
The challenges in the West African cocoa sector are well known, with a Fairtrade study in April 2018 showing that 58% of Fairtrade certified cocoa farming households in Côte d’Ivoire had incomes below the extreme poverty line.
Following an extensive global consultation process, Fairtrade International last year announced that as of 1 October 2019, the Fairtrade Minimum Price for conventional cocoa would increase by 20 percent to $2,400 per metric tonne, with additional increases for organic cocoa. The Fairtrade Premium for cocoa farmers and their cooperatives will also increase by 20 percent to $240 per metric tonne.
The Fairtrade Minimum Price serves as a safety net when market prices are low, while allowing farmer cooperatives to earn more when prices are higher. Fairtrade plans to consult with the governments of the two countries once details of the floor price and its implementation are confirmed to determine how the Fairtrade Minimum Price will work within the floor price structure.
Regardless of the selling price, Fairtrade cocoa farmers will continue to enjoy the benefits of the Fairtrade Premium, which is the highest fixed premium of any global program. In 2017, more than 220,000 Ivorian and Ghanaian cocoa farmers and their coops earned $27 million in Fairtrade Premium which they invested in projects of their choice.
Press release originally shared on June 13th from Fairtrade International in Bonn, Germany. For further information, contact email@example.com.
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