FLO Increases Cocoa Floor Price and Social Premium

Here’s a bit of welcome news. For the first time since 1997, the Fairtrade Labelling Organization (FLO) has increased the minimum fairtrade price for cocoa. Starting January 1, 2011, the minimum price will be $2,000/ton up from $1,600/ton. The social premium will also increase from $150/ton to $200/ton.

FLO is the global umbrella organization for all national fairtrade certifiers. It sets the fairtrade standards for the wide variety of goods now available on fairtrade terms. The increase in cocoa prices is long overdue as input costs of farmers have increased over the past thirteen years.

On a practical level, the increase of the minimum price won’t have any input as the market price continues to hover around $3,000/ton. But the increase in the social premium will have an immediate impact as cocoa farmer cooperatives will receive the social premium irrespective of the world market price.

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