Two major world cocoa producers, Ivory Coast and Ghana have boycotted World Cocoa Foundation (WCF) meeting in Belgium over pricing.
The industry meeting to be held in Brussels scheduled for this week would not see representatives of the two world leading cocoa producers in attendance as a result of the coming misunderstanding.
According to them, the multinational chocolate companies resist measures to lift farmers’ incomes.
This follows the two countries, which together produce more than 60 percent of the world’s cocoa, imposing two premiums on their beans aimed at tackling farmer poverty.
A report carried by Reuters sighted by DGN Online indicates that one premium, known as the origin differential, has dropped below zero in recent years under pressure from traders, effectively cancelling out part of another premium, the $400 per tonne Living Income Differential (LID).
Ghana and Ivory Coast somewhere in July expressed their dissatisfaction about the pricing saying that they would no longer sell cocoa with a negative origin differential, fixing it at zero for Ivory Coast and at +20 pounds sterling ($22) per tonne for Ghana.
However, companies including some of the world’s major chocolate makers and cocoa traders, which account for around 90 percent of purchases, are pushing for origin differentials as low as -200 pounds per tonne, the regulators said.
“The chief executive is not attending the World Cocoa Foundation (WCF) meeting in Belgium and none of the executives at COCOBOD will be there,” said Fiifi Boafo, spokesman for COCOBOD, Ghana’s cocoa regulator told the International media.
Yves Brahima Kone, the Director General of Ivory Coast’s Coffee and Cocoa Council (CCC), also said he would not attend the WCF meeting or any other industry meetings in protest.
Although Ivory Coast said last month it had sold some contracts with a non-negative premium, it is now having difficulty selling them.
“The major chocolate brands have resisted and tried to find means to circumvent payment of the LID,” said COCOBOD’s Boafo, accusing multinationals of waging a “silent war” against the farmers’ premium.
“A direct rejection of the LID would give brands bad publicity since the LID represents the economic pillar of sustainability, therefore erosion of the origin differential was the easier target,” he said.
The two regulators did not name any companies in their comments.
Major players Cargill, Olam and Barry Callebaut declined to comment when contacted by Reuters. Others including Nestle, Mondelez, Hershey and Mars Wrigley, and traders Touton, CEMOI and Ecom Trading, did not immediately respond to requests for comment.
Sustainability programmes launched since 2008 and aimed at tackling issues such as child labour have also benefited companies more than farmers, said the CCC’s Kone. Ivory Coast’s cocoa production has almost doubled in less than 15 years under the programmes, which has pushed down prices.
“We are considering new ways to address this issue with the industry, including banning access to our cocoa farms for their sustainability programs,” Kone said.