Earlier this year, cocoa market prices took a sharp tumble, falling below $4,000 per metric tonne for the first time since November 2023.
Tony’s Chocolonely, which is known for its work in helping to make cocoa fairer, labelled it as a “massive blow” for farming families which had finally been benefitting from higher prices.
“Over the past couple of years, we’ve seen prices at a level that enables farmers to earn a living income, but that stability is proving fragile,” a spokesperson from the business told Food Manufacture.
“What’s deeply concerning now is that farmgate prices in both Ghana and Côte d’Ivoire have dropped sharply again, falling below what farmers actually need to be enabled to earn a living income.
“In Ghana, we’re looking at a reduction of around 21%, and in Côte d’Ivoire, the drop is even more dramatic at 57%. For farmers who are already operating on thin margins, this isn’t just a fluctuation – it’s a direct hit to their livelihoods.”
The farmgate price is the most critical factor in the cocoa value chain, according to Tony’s.
“It’s what farmers are paid at the very start, and it ultimately determines whether they can earn a living income or remain, sadly, in poverty,” the spokesperson added.
In West Africa, these prices are generally set by governments and are highly influenced by the global market prices for cocoa. This means farmers are left with little control.
Why have cocoa prices dropped?
The farmgate price reductions can be mostly attribute to a steep decline in global cocoa prices following a period of extreme volatility - where prices spiked to record highs before falling sharply.
In response to reduced export revenues, governments in Ghana and Côte d’Ivoire lowered the fees paid to farmers.
“This kind of price drop shows just how fragile the system is for cocoa farmers in West Africa,” said the Tony’s representative.
“When prices fall, farmers are pushed further below into poverty, making it harder to invest in their farms and families. At the same time, it increases both the risk of issues like child labour – because poverty remains the root cause - and the risk of deforestation, as farmers may be forced to clear more land in search of crops with higher yields just to make ends meet.”
As reported in our sister publication, Confectionery News, food and drink manufacturers will likely view the drop with mixed feelings. While lower raw material costs could help to ease margin pressures following a sustained period of high cocoa prices; waning farmer confidence, concerns over bean quality, and ongoing structural issues in key cocoa producing regions will prevent them from resting easy.
For Tony’s, however, there is no scenario in which this news is welcome.
“As an industry, we can – and must – do better,” the chocolate business wrote on Linked In.
“Higher cocoa prices have proved that companies can pay farmers a price that enables them to earn a living income.
“At Tony’s, we’ll keep paying at least a Living Income Reference Price (LIRP) long term – that’s a promise. But it’s time the whole industry up stepped up + showed farmers its commitment to fixing the issues in cocoa.”
One way Tony’s is helping the industry to ‘step up’ is through its open sourcing model, Tony Open Chain. Today, this is used by more than 20 ‘Mission Allies’, including Ben & Jerry’s, Waitrose, Pip & Nut, and Huel.
Tony’s Open Chain is a purely impact-driven platform. The business does not make money out of it. Instead, it’s the way it makes impact at scale; collaborating on cocoa, whilst competing on shelf.
Last year, the initiative impacted more than 30,000 cocoa farmers and their families across Ghana and Côte d’Ivoire.
“Through our unequally divided chocolate bars and the expansion of our portfolio – with the launch on the market of our first-ever Filled bars - we want to raise awareness of the injustice in the cocoa industry among retailers and Choco Fans, so they can actively demand ethically produced chocolate," added the spokesperson.
“We hope encouragement from people and retailers will mean other producers want to help change the industry.”
