World’s top cocoa grower says farmer premium is here to stay

Ivory Coast, the world’s top cocoa grower, says a premium put in place to boost the livelihoods of their farmers will not change from its current form.

“We now consider the LID to be part of the commercial life of cocoa,” Yves Kone, the managing director of regulator Le Conseil du Cafe Cacao, said during an interview in the commercial capital, Abidjan, late Wednesday.

The so-called Living Income Differential, an additional $400 per ton of cocoa sourced from the country, came into effect at the beginning of the 2020-21 season after Ivory Coast and Ghana — which together make up nearly 70% of global exports of the key chocolate ingredient —joined forces to have greater control of the market.

The move, however, coincided with a glut in chocolate sales due to lockdowns from London to Los Angeles as a result of the global pandemic.

Kone said a temporary measure to offset the cost of the LID by negotiating on a separate country differential will be adjusted.

“Some people have thought that because we have made efforts to reduce the country differential that we are allowing the LID to die,” he added. “No, the LID is here to stay.”

The differential allowed the regulator to increase the farmgate price to 1,000 CFA francs ($1.79) per kilogram at the start of the 2020-21 season, but it was later reduced for the smaller of the two annual harvests in April.

Both Ivory Coast and Ghana are anticipating a slightly smaller harvest for the season that starts on Oct. 1.

Ghana expects to produce 950,000 tons, about 50,000 tons less than projected for this season. Ivory Coast may have 200,000-250,000 tons less than this season, said Kone.

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