Cocoa

Cote d’Ivoire threatens to pull sustainability programmes after Hershey buys ‘cheap’ cocoa beans on futures market

By Anthony Myers contact

- Last updated on GMT

Hershey and other chocolate companies say they support the LID premium to help farmers receive more money for their beans. Pic: ConfectioneryNews
Hershey and other chocolate companies say they support the LID premium to help farmers receive more money for their beans. Pic: ConfectioneryNews

Related tags: Cocoa, Hershey

Cote d’Ivoire, the world’s largest cocoa producing country, has called the move by Hershey to reportedly buy 30,000 tonnes of cheap beans from the ICE New York futures exchange an attempt to derail plans for the Living Income Differential (LID) set up to help fight famer poverty.

Along with Ghana, Cote d’Ivoire plans to sell its first full cocoa crop this season under a new scheme that includes a price premium of $400 per tonne, arranged with the chocolate industry as a way of providing a living income for farmers.

Hershey and other chocolate companies say they support the premium, in exchange for the two governments continuing to support their sustainability schemes - but news of Hershey also striking a deal through the ICE exchange​, which will allow it to avoid paying the LID for those beans, puts the arrangement at risk.

Yves Kone, head of Le Couseil du Café-Cacao of Cote d’Ivoire (CCC), has written to the president of the World Cocoa Foundation (WCF) industry group that the purchase signalled the company’s opposition to the LID scheme.

It is a conspiracy to defeat the concept of the floor price as known, and therefore not to grant a remunerative price to all cocoa producers in our countries​,” Kone said in the letter, which has been leaked to the media.

Ghana’s cocoa regulator (Cocobod) has already threatened to suspend chocolate companies’ sustainability schemes, which are used to assure consumers that their beans are ethically sourced, because of the Hershey action.

Name and shame

Kone, said he would also publicly name and shame companies, a threat also made by his Ghanaian counterpart, Joseph Boahen Aidoo, and suspend the voluntary sustainability and certification programmes in his country.

Hershey said in a statement it has long supported initiatives that improve the incomes and livelihoods of farmers.

"This includes supporting and participating this year in the Ivorian and Ghanaian Living Income Differential as we buy 2020/2021 season cocoa based on the needs of our business.  All 2020/2021 cocoa purchased within our supply chain since the implementation of the LID in West African countries includes this price premium. Beans sold prior to the implementation of the LID would not include the premium​."

The WCF was unavailable for comment.

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