In a bittersweet blow, investors call the Cocoa Cartel’s bluff

Cocoa producers in Ghana and the Ivory Coast set a minimum price for cocoa, but investors aren’t biting -- and it may not help as much as hoped.


June 18, 2019

Last week, cocoa cultivators in Ghana and the Ivory Coast — which together produce more than 60% of the world’s choco-beans — agreed to set a minimum cocoa price of $2.6k per ton.

But, after spiking in a short sugar rush, cocoa prices are falling again as investors bet on consistent cocoa, Axios reports.

Can controls correct cocoa chaos?

Cocoa prices were consistently above $3k per ton between 2014 and 2016, but fell to $2.2k in March due to oversupply.

So Ghana and the Ivory Coast planned to use their massive market share to keep prices sweet — and prevent some of cocoa’s bitter problems.

The considerable conundrums of commodity cocoa

Consumers spend $100B on chocolate every year, but only $5B of that ends up in Africa — where ⅔ of that chocolate comes from. 

This lack of cocoa cash results in reliance on child labor (the industry employs 1.6m children, some trafficked from other countries) and rock-bottom wages (most cocoa families live on less than $2 per day). 

Proponents argue fixing prices could keep kids out of the fields. 

But others argue that processing, not price, is more powerful, pointing to successes in Indonesia — which increased its proportion of value-added cocoa exports from <20% in 2010 to around 95% today.

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