Fairtrade International is raising the Fairtrade Minimum Price for conventional cocoa from $2,000 (£1,570) to $2,400 (£1,886) per metric tonne at the point of export (FOB), marking a 20% increase.
For organic cocoa, the Fairtrade price will be $300 (£235) 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 $2,300 (£1,807) per metric tonne for Fairtrade certified organic cocoa.
The additional Fairtrade Premium will be increased from $200 (£157) to $240 (£188) per metric tonne, the highest fixed premium of any certification scheme. This is an amount on top of the selling price, paid directly to farmer organisations to spend on projects of their choice.
The premium helps to build strong and viable co-operatives that can respond to their members needs and strengthen them as long-term business partners for buyers. And the new minimum price will allow average Fairtrade cocoa growing households to earn above the extreme poverty line – after a study earlier this year showed that 58% of Fairtrade certified cocoa farming households in Côte d’Ivoire had incomes below the extreme poverty line.
The review of the Fairtrade Minimum Price and Premium is linked to a wider Fairtrade strategy to work towards a living income for cocoa farmers. Under that strategy, Fairtrade International has also established a Living Income Reference Price for cocoa in Côte d’Ivoire and Ghana, providing the first target price for the industry based on living income benchmarks and consultation on farm costs.
The new price structure, agreed by the Fairtrade Standards Committee, a multi-stakeholder body which includes farmer and trader representatives, will take effect on 1 October 2019. The decision follows a lengthy consultation process across the cocoa supply chain with Fairtrade farmers, traders, manufacturers, and chocolate brands.
“This is good news for West Africa’s cocoa growing communities,” said Fortin Bley, an Ivorian cocoa farmer and chairperson of Fairtrade Africa’s West African Network. “Farmers have been badly squeezed by low world prices, so the higher Fairtrade Minimum Price and Premium help to level the playing field for a more sustainable future.”