GLOBAL MARKET REPORT Cocoa prices and sustainability

The report examines the global cocoa market, highlighting the tension between growing demand and climate-related supply risks. It analyzes how VSSs like Fairtrade and Rainforest Alliance attempt to improve sustainability and farmer incomes, while noting that power imbalances and low farm-gate prices continue to drive poverty among the 5 to 6 million cocoa farmers worldwide.

• Cocoa production is dominated by smallholders, with an estimated 5 to 6 million farmers globally, 90% of whom manage farms of 5 hectares or less.
• Climate change poses significant risks to cocoa viability; West African and Amazonian producing areas are expected to become less suitable by 2050, with high temperatures and droughts reducing yields.
• Cocoa farming is a driver of deforestation, contributing to the loss of 70% of forests in Ghana and Côte d’Ivoire over the last 30 years, though about 15% of Côte d’Ivoire’s production still occurs in protected forests.
• VSS-compliant cocoa represented between 27% and 47% of global production in 2019, but growth has slowed, with the CAGR dropping to between -0.55% and 8% from 2014 to 2019.
• The cocoa value chain is highly asymmetric; manufacturers and retailers in some European chains capture 90% of total margins and 70% of the final price of a dark chocolate tablet, while farmers receive less than 7% of margins and 11% of the final price.
• Approximately 2 million cocoa farmers live below the poverty line, exacerbated by low farm-gate prices and a lack of bargaining power against a concentrated market where three companies can process two-thirds of the world's harvest.
• VSSs provide a price buffer; farmers selling cocoa compliant with Fairtrade and Organic certifications may have received prices 20% to 30% higher than conventional cocoa as of 2018.
• European regulations, including the EU Corporate Due Diligence Directive and proposed deforestation-free product regulations, are driving demand for VSS-compliant cocoa as companies must identify and mitigate value chain risks.
• The Living Income Differential (LID) of USD 400/tonne introduced by Ghana and Côte d’Ivoire in 2019 aimed to increase farmer prices, but its impact was limited by pandemic-related demand drops and buyer reluctance.

APA

Bermudez, S., Voora, V., Larrea, C., & Luna, E. (2022). GLOBAL MARKET REPORT Cocoa prices and sustainability. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-11/2022-global-market-report-cocoa.pdf

Chicago

Bermudez, Steffany, Vivek Voora, Cristina Larrea, and Erika Luna. GLOBAL MARKET REPORT Cocoa prices and sustainability. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-11/2022-global-market-report-cocoa.pdf.

Wikipedia

{{cite report |last1=Bermudez |first1=Steffany |last2=Voora |first2=Vivek |last3=Larrea |first3=Cristina |last4=Luna |first4=Erika |title=GLOBAL MARKET REPORT Cocoa prices and sustainability |publisher=International Institute for Sustainable Development |date=November 2022 |url=https://www.iisd.org/system/files/2022-11/2022-global-market-report-cocoa.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bermudez2022global, author = {Bermudez, Steffany and Voora, Vivek and Larrea, Cristina and Luna, Erika}, title = {{GLOBAL MARKET REPORT Cocoa prices and sustainability}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = nov, url = {https://www.iisd.org/system/files/2022-11/2022-global-market-report-cocoa.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }