Cocoa Price Surge: Can Farmers Finally See Fairer Compensation?
Recently, a surge in global cocoa prices has dominated news headlines and sparked widespread concern. Multinational companies have benefited of low cocoa prices payed to farmers for years. Now it's time for a fairer market.
30 Apr 2025
The global chocolate market is big business, estimated at a substantial US$186 billion. Recently, a surge in global cocoa prices has dominated news headlines and sparked widespread concern. This increase can be attributed to several interconnected factors impacting cocoa production in key regions. Ivory Coast and Ghana, which together account for over 60% of the world’s cocoa supply, have encountered significant challenges. Government-run cocoa boards in these countries determine the “farmgate price” that cocoa farmers receive, which has historically remained below the prevailing market price.
This system, which favors exports and consequently the finances of States, has benefited multinational companies, often referred to as ‘Big Chocolate,’ as it has kept cocoa prices low. Consequently, many farms abandoned cocoa cultivation, also due to the pressures of climate change and disruptions in the supply chain. In 2024, unusually high temperatures were detrimental to cocoa trees. Diseases like the cocoa swollen shoot virus (CSSV) and black pod disease have devastated cocoa farms. New regulations, such as those in the European Union restricting imports from deforested land, have further exacerbated the storage of large quantities of cocoa before the regulation came into effect, leading to speculative intentions. The new European organic and anti-deforestation regulations will add to producers’ red tape woes, given all required evidence to prove compliance with new rules against deforestation—even if producers have been empirically complying with such standards for years thanks to traditional farming practices. The only way for these producers to continue practicing organic and deforestation-free agriculture is to increase market outlets for their products, all while ensuring producers get paid adequate prices.
The Strategy of Shifting Cocoa Price Increases to Chocolate Consumers
The big companies have been able so far to market chocolate as an affordable treat, maintaining consumer perception of it as a “cheap food”. Now, as the existing pricing structure is becoming increasingly unsustainable, they try to persuade consumers to pay more for their favorite chocolate bars due to these underlying economic and environmental factors.
It seemingly appears to be a strategy to offload the rise in cocoa prices onto the chocolate consumers. So far, those who have benefited most economically in this production chain are those who stand between those who grow and harvest the cocoa fruit and those who buy the chocolate bar. Cocoa farmers upstream, being last on the value chain totem pole, have increasingly fetched lower prices as retailers, manufacturers and other intermediaries have taken a bigger share every subsequent year, meaning the value of cocoa beans has reduced from 50% of a chocolate bar in the 1970s, to less than 6% in 2022, before the recent rise. Instead of raising alarms and preparing the ground for consumer price increases, it would be time to work on the supply chain to make it fairer and more transparent.
@LucaRinaldini - Cocoa farmers in Mexico
Farmers and Big Companies: A Different Perspective
The perspective of individual farmers on commodity crops like cocoa, coffee, or grains is fundamentally different from that of large multinational companies that process, market, and sell these commodities. For most small-scale farmers, commodity crops are not just raw materials; they are their primary source of income, their family’s sustenance, and their way of life. Their focus is on maximizing yield and securing a fair price that covers their production costs, labor, and allows for a decent standard of living. Price volatility can have devastating consequences on their financial stability and well-being.
When farmers adopt monoculture systems, they become even more fragile and exposed to speculation on the prices of cultivated commodities; they are directly impacted by soil degradation, water scarcity, and the increased incidence of pests and diseases associated with these simplified ecosystems. This is the reason why adopting an agroecological approach, based on different, mixed and biodiversity-rich crops is crucial to ensuring the food security and well-being of farming families. Sustainable farming practices are crucial for the future of their farms and their families.
The Need of Fair Prices
Investing in and supporting agroecological production and guaranteeing fair markets on a consistent basis is in everyone’s interest, as this would stabilize crop yields and avoid drastic price fluctuations. When all actors involved in the cocoa value chain commit to fair and sustainable prices in the long term, both ecological and economic resilience is promoted. This not only prevents temporary price surges but also, in times of increased supply, prevents prices from falling to unsustainable levels that compromise the well-being of producers and the environmental sustainability of producing regions.
Price Increase Is Not Bad News
However, as global demand for chocolate continues to rise, for independent cocoa farmers the price increase is not bad news at all; on the contrary.
Farmers are increasingly advocating for fair trade practices and prices that reflect the true cost of production, including environmental and social considerations. They seek recognition for their labor and the risks they undertake. Farmers are concerned with their immediate livelihoods and the long-term viability of their farms and communities. Big companies are driven by profit and efficiency on a global scale. This can lead to situations where farmers are paid prices that don’t cover their costs or reflect the quality of their produce.
Why Can’t Cocoa and Chocolate Be Closer?
The situation might be very different if the processes of turning cocoa into chocolate were not totally in the hands of the multinationals that process it. Have you ever wondered why cocoa-exporting countries do not equip themselves to deal with the processing steps? The answer lies not in a lack of entrepreneurial spirit but in the fact that importing the necessary equipment is made impossible by a policy of tariffs that makes it totally inconvenient to try to keep at least part of the production chain in the countries of origin of the raw material. Thus, the added value created by processing cocoa into chocolate flows away from local communities through exports.
A Crucial Need for Equitable Chocolate
Understanding these different perspectives is crucial for developing more equitable and sustainable supply chains that benefit both producers and consumers in the long run. Paying more for cocoa to those who grow it should not lead to offloading price tensions onto consumers. Initiatives like fair trade certifications, direct sourcing programs, and greater transparency in pricing mechanisms should be more widely practiced with the aim of bridging this gap.
Edward Mukiibi, Slow Food President
Sources
https://spp.coop/the-paradox-of-rising-cocoa-prices/?lang=en
https://www.researchtecglobal.com/report/african-cocoa-production-market-analysis
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