Fairtrade raises cocoa prices
by Redaktion (comments: 0)
As the global cocoa industry faces dwindling supply after years of underinvestment in cocoa farms in developing countries, Fairtrade Labelling Organizations International (FLO) announces new, higher prices for Fairtrade cocoa. “Many cocoa farmers around the world don’t have enough money for their families’ basic needs – let alone to invest in new younger cocoa trees which can be their solution to a sustainable income from their cocoa farms for decades to come,” says Rob Cameron, FLO CEO. “With this higher Fairtrade income, cocoa farmers will get much needed funds to invest in farm improvements and their children’s education.” As of 1 January 2010, cocoa farmers will earn 200 US$ in Fairtrade premium to invest in business and community projects for every metric tonne (MT) of cocoa they sell, up from 150 US$ / MT. With this higher Fairtrade premium and a rapidly growing Fairtrade cocoa market, FLO expects cocoa farmer organizations will earn at least 10 million US$ in 2011 for development projects they choose as priority.
To strengthen its safety net for farmers, FLO also increased its Fairtrade minimum price to 2000 US$ / MT FOB (free on board) for conventional cocoa. When market prices are above the Fairtrade minimum price, Fairtrade buyers must pay at least the market price. But as cocoa prices drop, Fairtrade farmers have the security of a minimum price floor below which their income cannot fall. Though world market prices reached an all-time high in January, they have begun a potentially dangerous downturn. “This is very good news for farmers,” says Mr. Emmanuel Kwabena Arthur, Executive Director of Kuapa Kokoo, Ghana’s largest Fairtrade cocoa cooperative representing 50,000 farmers. “Now the farmers can do so many things with this money. They can be seen by doctors, invest in schools and help their communities. More farmers will have more benefits.” This higher Fairtrade pricing will benefit tens of thousands of cocoa farmers in West Africa, Latin America and elsewhere, with more joining every day. In the past year, the number of cocoa farmer organizations certified by Fairtrade nearly doubled.
Sales of Fairtrade cocoa grew by 35 % in 2009 alone, thanks in part to growing consumer desire to purchase Fairtrade products and commitments by global chocolate brands to use exclusively Fairtrade cocoa for major product lines including Cadbury Dairy Milk, Nestle Kit Kat and Green and Black’s. More and more companies are including Fairtrade cocoa in their ice cream, cookies, baked goods, and now in a rapidly growing range of Fairtrade cosmetics. FLO expects continued dramatic growth in 2010 and 2011. FLO is developing a Fairtrade minimum price for organic cocoa which it expects to announce in November, also to be valid from 1 January 2011. (Pictures by Kennet Havgaard: Cocoa production at Kuapa Kokoo, the largest Fairtrade cocoa cooperative in Ghana representing 50,000 farmers)