Navigating the Cacao Crisis
We hope this newsletter finds you well. As part of our commitment to transparency and keeping you informed about developments in the cacao industry, we wanted to share some important updates with you.
As you might have heard in the news, listened on the radio, or seen as prices increase in the supermarkets – cacao prices are currently at a surge due to a global shortage.
It’s not the first year that yield has been significantly lower than the previous years, but a lot of factors are now adding up and contributing to a global shortage that is we all see the effects of.
What’s Happening in Ghana Now
Ghana, along with Ivory Coast, Cameroon, and Nigeria, are the world’s top cacao producers. Together, they are responsible for roughly 65% of the world’s cacao supply.
Ghana has recently raised the state guaranteed cacao price by more than 63% to address the challenges faced by its cacao farmers, including black pod disease, rising temperatures, and lack of infrastructure upgrades all leading to significantly lower yield.
With 800,000 Ghanaian farmers struggling to make ends meet, naturally, there has been little money left to invest back in their farms and support sustainable cocoa production. The result is a record-low harvest of just 30% of that of the previous year.
How We Got Here: The Background Story
The cocoa industry has been grappling with various issues for years, leading to the current crisis. Due to 40+ years of being underpaid, with little control to negotiate with buyers (all cacao in Ghana is sold through the government), Ghanaian farmers started to smuggle cacao to neighbouring countries like Togo and Ivory Coast to get a few extra $.
They also started to diversify their farms with other crops that would make more money than cacao. With cacao framing being very demanding with an increasingly poor return, it has become less lucrative over the years.
Despite all the ‘sustainability’ efforts by top cacao traders and manufacturers such as Mondelez, Hershey, Nestlé, Lindt, Barry Callebaut, the Ferrero group, MARS, and more, the situation at farm-level has worsened (while their profits increase), especially since the COVID.
Impact on Global Cacao Market
The challenges in West Africa have had a ripple effect on the global cacao supply. Central American cacao, known for its quality and flavour, has also been affected as we are now facing a world shortage and manufacturers, big and small, are hunting for cacao elsewhere.
What It Means for The GOOD Chocolatier
As a company committed to sourcing organic, fair-trade cacao from sustainable farm cooperatives in Ecuador and North Peru, we have been closely monitoring the situation. As of now, our cacao has doubled in price – bringing it from $11 CAD to a whopping $22 CAD per kg, and no slow down of increase in sight.
To give you an example of what the difference is to conventional cacao, here is a quick comparison: Conventional cacao (non fair trade, non organic, mostly unethical) used to be ~$2,50 per kg, but sees now record heights of $10 per kg. The current surge-price of conventional cacao is still lower than a fairly traded, high quality cacao before the increase.
Unfortunately, the volatile cacao market and current doubling of cacao prices has necessitated a price increase for our products. While this decision was not taken lightly, it is essential for us to continue supporting farmers and maintaining our commitment to sustainability.
When Are We making the Change
Starting May 1st, our regular 5 core bars will increase from $8.99 to $9.99 and our seasonal bars will increase from $9.99 to $10.99 (10-11% increase). While we absorb most of the spike ourselves, and are looking for a range of solutions in the background, this small increase will help us maintain our high-quality, ethical standards while navigating the supply challenges until circumstances change further.
What we Will do For You
With Earth Day & Mother’s Day coming up, and the increase in mind, we will offer some juicy discounts before May 1st, so you can stock up on your favourite bars. We really don’t want you to suffer through low quality chocolate that is increasing in price, with no transparency to ethical standards, and more sugar than cacao 😉.
We hope that this clears some questions you might have had. Please let me know if any of this needs more clarification, just send me an email.
As always, we promise to stand by our values and high quality cacao and hope that we can make it through these times together. Thank you for your ongoing support ❤️
Sources:
Reuters: Ghana hikes 2023/2024 cocoa farmgate price as supplies tighten.
VOA News: ghana’s-cocoa-farmers-suffer-falling-incomes-as-chocolate-makers-reap-profits-says-oxfam
BNN Bloomberg: Cocoa Price Hits 10000 a Tonne