Farmer organizations will be guaranteed a higher price for cocoa sold on Fairtrade terms, as part of Fairtrade’s strategy towards enabling living incomes.
Fairtrade International said it will raise the Fairtrade Minimum Price for conventional cocoa from USD 2,000 to USD 2,400 per tonne at the point of export (FOB), marking a 20 % increase.
For organic cocoa, the Fairtrade price will be USD 300 above the market price or the Fairtrade Minimum Price, whichever is higher at the time of sale. This is a change from the current minimum fixed price of USD 2,300 per tonne for Fairtrade certified organic cocoa.
World cocoa prices plunged by more than a third last year, and it is farmers who bear the brunt of price volatility. Fairtrade is the only certification scheme that has a mandatory minimum price, which acts as a safety net for farmers when market prices fall while allowing them to benefit when prices rise.
For reference, the current cocoa price set by the government of Ivory Coast, the world’s biggest cocoa producer, is USD 2,124 FOB. Fairtrade buyers pay farmer organizations the differential when the Fairtrade Minimum Price is higher.