Global Cocoa happenings
There is lots happening in global cocoa land.
1.The price of dried beans has increased more than 50% in 2023 – up from about US$2,500 to US$3,500plus - a result of a perceived looming cocoa shortage. This is not resulting in an increase to farm gate price in Ghana, which is the second largest cocoa producer after Ivory Coast. However, the Ghanaian government seems to be moving to increase the regulated farm gate price so as to provide a viable living for the largely subsistence farmers.
2.Ghana’s cocoa production sector is under serious threat with climate change, disease, moribund farms, overaged tree stock, an aging farmer population, and an acute labour shortage, etc.
Publication ‘Confectionary News’ article of 29th September, reprinted from the www.theCocoaPost.com article by editor Kojo Hayford, provided good news on a World Bank funded initiative to make Ghana’s cocoa industry more attractive and sustainable. The project involves
- Rehabilitating cocoa plantations with 1`17m seedlings grown by ACL-KGIL, one of Ghana’s largest agricultural service providers
- This initiative pleasingly focusses on Women’s Empowerment with 65% of the workers in the seed nurseries being women.
- Attracting unemployed Ghanan youth to work in the cocoa industry. So far, some 30,000 young people have been recruited on fair terms and conditions.
3. Cocoa of Excellence has released ‘Tools for Sensory Evaluation’ of cocoa and chocolate. Catching up with the wine industry?
4.On 29 June 2023, the European Union's new regulation to curb the EU market's impact on global deforestation and forest degradation (the "EU Deforestation Regulation" or "EUDR") came into force.1
The EUDR covers seven commodities (i.e., cattle, cocoa, coffee, oil palm, rubber, soya, and wood), as well as many derived products listed in the annex to the regulation (e.g., meat products, leather, chocolate, coffee, palm nuts, palm oil derivatives, glycerol, natural rubber products, soybeans, soy-bean flour and oil, fuel wood, wood products, pulp and paper, printed books).
EUDR non-compliance precludes access to (and exports from) the EU
From 30 December 2024 (or 30 June 2025 for micro or small businesses), it will be prohibited to place relevant products on the EU market, or export them from the EU, unless they are:
- 'deforestation-free';
- produced in accordance with the relevant legislation of the country of production; and
- covered by a due diligence statement indicating no more than a negligible risk of non-compliance.
EUDR definitions
'Deforestation-free' means that the relevant products contain, have been fed with or have been made using, relevant commodities that were produced on land that has not been converted from forest to agricultural use, whether human-induced or not, after 31 December 2020.
Importantly, and unlike previous EU laws on illegal logging and related trade (such as the EU Timber Regulation), the EUDR targets deforestation that is legal in accordance with the laws of the country of production. The regulation cites a report by the Forest Policy Trade and Finance Initiative which estimates that between 2013 and 2019, around 30 % of deforestation destined to commercial agriculture in tropical countries was legal.
- The area of production must comply with local social and environmental laws
- Primary responsibility lies with the company placing the product on the EU market
- Due Diligence must follow the prescribed method with transparency and information along the supply chain
- Expect regular checks from national authorities and scrutiny by private parties. Potential fines of up to 4% of the company's EU turnover, confiscation or exclusion from public funding or contracts
References
EU to impact global deforestation and forest degradation
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