Fall in the price of cocoa – but not of organic cocoa

The producer price of cocoa has fallen by 40 % within one year. It is currently hovering between 1,800 and 1,900 US dollars per tonne. That's 1,600 to 1,700 euros – not enough for the cocoa farmers to live on. Do organic producers get more? Organic-Market.info asked organic cocoa importers and suppliers this question.

There are several reasons for the fall in price on the cocoa market

The storage facilities of traders and processors are full. The current harvest in West Africa has been very good and this is where over 60 % of the beans come from. Another factor is that especially in Asia the demand for products containing cocoa has not increased as much as expected. The fall in  price hits mainly the small farmers in Ghana and Ivory Coast hard. Even in years of good cocoa prices they live well below the poverty line.

Certification brings higher prices

It's a little better for producers who can sell their beans as certified Fairtrade because in the Fairtrade system there's a minimum price when buying beans that must not be undercut. This minimum is 2,000 US dollars per tonne. Added to that is the Fairtrade premium of 200 dollars per tonne. For organic beans there's another 300 dollars per tonne, so that for a tonne of organic-fair cocoa a producer receives at least 2,500 dollars.

Organic-Market.info asked organic cocoa importers and suppliers of organic chocolate in the specialist trade how they deal with the massive fall in the producer price of cocoa.

This is how they answered:

Naturata CEO Liane Maxion pointed out that the figures apply only to common-grade consumer cocoa that comes mainly from Africa. “The higher quality varieties Trinitario and Criollo, grown mainly in Latin America, have for a long time no longer been subject to the stock exchange. These higher quality varieties are the only cocoa Naturata uses, and there has not been any change in price. The cooperatives in South America definitely don't sell at such low prices, because the quality is quite a bit better than that of stock exchange cocoa, and also the demand for organic cocoa is currently very high, so that cooperatives have no reason to lower their prices.”

It's true that in West Africa hardly any organic cocoa is produced. 80 % of the world's organic cocoa comes from the Dominican Republic in the Caribbean, with the rest coming mainly from other Latin American countries: Ecuador, Bolivia, Peru and Panama. The harvest in the Dominican Republic was extremely poor, writes Liane Maxion, “which is why there's a great shortage of organic cocoa from the Dominican Republic and why the prices are all higher than last year.”

The Fairtrade house Gepa sources most of its organic cocoa from the cooperative umbrella organisation Coopproagro in the Dominican Republic. “Gepa is currently paying well over 3,000 US dollars per tonne of organic cocoa,” the company wrote in its response. It added that they have repeatedly paid the cost of Naturland organic certification. Gepa shows on the internet a breakdown of the price of chocolate.

Raw material cocoa (Gepa price)

Example: 100g Gepa chocolate

Source: Gepa

Rapunzel sources its cocoa from the cooperatives El Ceibo in Bolivia and Conacado in the Dominican Republic. “We always pay these partners a price higher than the level of the world market. The price includes an organic premium for the farmers and a Fairtrade premium that goes to the community for eco-social projects,” is what  Rapunzel said in response to our enquiry. In addition the farmers receive “a so-called quality premium according to the origin and quality of the cocoa.” Rapunzel has on the internet a detailed presentation of the value chain for a bar of chocolate.

In its response the organic-fair importer Ethiquable gives concrete data: “Despite falling world market prices the cooperative will continue to pay its partners between 4,000 and 4,300 US dollars per ton of cocoa.”

More on this topic:

The Cocoa Barometer reports every two years on the cocoa market and the situation of the small farmers.