FAIRTRADE RAISES COCOA PRICES
12.10.2010 - As the global cocoa industry faces dwindling supply after years of underinvestment in cocoa farms in developing countries, the Fairtrade Labelling Organisations International (FLO) today 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 childrens' education."
As of 1st January 2011, cocoa farmers will earn US$200 in Fairtrade Premium to invest in business and community projects for every metric ton (MT) of cocoa they sell, up from US$150/MT. With this higher Fairtrade Premium and rapidly growing Fairtrade cocoa market, FLO expects cocoa farmer organisations will earn at least US$10 million in 2011 for development projects they choose as priority.
To strengthen its safety net for farmer, FLO also increased the Fairtrade Minimum Price to US$2000/MT FOB for conventional (non-organic) cocoa. When the 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."
(A small farmer of Fairtrade cocoa in Ghana, ©guardian.co.uk)
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. FLO is developing a Fairtrade Minimum Price for organic cocoa which expects to announce in November, also to be valid from January 1st 2011.
Download the Cocoa Factsheet.
