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Cocoa is rare and expensive. But women farmers still don’t receive any more money – because the state sets the price.
Author: Rachel Winkelmann, Hannah Wey, Benita Vogel
There is joy at Lindt & Sprüngli. The Zurich chocolate maker posted higher profits in the last financial year despite rising prices of key raw materials. Above all, that of cocoa: This more than doubled last year because there were major crop failures due to capricious weather.
Not a big problem for Lindt & Sprüngli. So the group has acquired a large cocoa cushion. “We physically filled our warehouses with cocoa because we were worried that we wouldn’t be able to get the qualities we needed to the extent we needed,” says Lindt & Sprüngli boss Adalbert Lechner. The company has also hedged against rising raw material prices.
More expensive gold bunny
Last but not least, a price increase also helped to increase profits. Lindt & Sprüngli has increased prices worldwide by 10.1 percent. According to the Lindt & Sprüngli boss, price increases are easier to implement, especially for gift items such as gold bunnies.
Retailers in Switzerland have also increased shelf prices for chocolate. On average, these rose by 5.3 percent last year, as confirmed by the Chocosuisse industry association.
The prices in Ivory Coast and Ghana were already set before the big increase. This means that these farmers still receive the price they set last fall.
Higher prices in stores and at processors – do the cocoa farmers in Ghana and Ivory Coast also benefit from this? Only very few do, says raw materials expert Andrea Hüsser, who is also the managing director of the Good Chocolate Hub. “The prices in Ivory Coast and Ghana were already set before the big increase. That means these farmers still get the price they set last fall.” And this is a third below the world market price.
The states want to secure part of the cocoa business with the administered prices. “The price is set by the state in these two countries in order to protect the cocoa farmers and also guarantee the state a secure income,” says Hüsser. The governments were unable to anticipate the high increase.
Farmers in Latin America are doing better
Cocoa farmers in countries without administered prices could benefit. This is the case in Southwest Asia, also partly in Latin America or in the neighboring countries of the two main producing countries, Ghana and Ivory Coast. “There are few farmers there who can actually benefit from this,” says Hüsser.
It is expected that Ghana and Ivory Coast will set higher prices this year. However, the prospects for the coming harvest are better again. It is expected that the cocoa price will fall again in autumn.
However, there is still no all-clear for consumers. In any case, Lindt & Sprüngli has already announced further price increases.
Child labor: Lindt & Sprüngli vows to improve
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Child labor on cocoa plantations is a reality. Lindt & Sprüngli was also recently affected by this Rundschau report revealed.
Now the company vows to improve. The company sourced almost three quarters of its cocoa last year through its own or external sustainability programs. The goal is to increase this proportion to 100 percent by 2025.
Among other things, Lindt & Sprüngli wants to increase the income of farming households.