Twin Trading is not well known in the U.S., but it should be. Since 1985, it has done more than any agency to make fair trade real for ordinary farmers around the world. Starting with importing the first fair trade coffee to the UK to creating CafeDirect to helping found Kuapa Kokoo to launching Divine Chocolate, it has been a powerful force in support of fairtrade world wide. Check out this nice tribute on the Divine Chocolate Blog.
Ghana Increases Producer Prices
With the new cocoa season underway, Ghana’s Cocoa Board (COCOBOD) announced a 33 percent increase in farm gate prices. The new price of GH¢200 per bag lifts the per ton price to GH¢3,200 ($2,238) from last year’s GH2,400. The new prices recognizes the increases in the world market price over the past year.
More importantly, however, it recognizes the prevalence of smuggling which has cut into Ghana’s exports. With some estimates as high as 100,000 tons smuggled to the Côte d’Ivoire last year alone, stopping this outflow has become a top priority of the COCOBOD. Last year’s harvest amounted to 632,024 tons, 10 percent below the 700,000 tons of the 2008/2009 cocoa year.
COCOBOD seems hopeful that the price increase will lift this years total exports above the 700,000 ton level.
Uganda Aims to Expand Cocoa Production
More and more countries situated in the magic band of 20 degrees north and south of the equator are giving cocoa another look. The high prices of the moment are probably an important factor.
Uganda is not a name usually associated with cocoa. But the country has been busy expanding its cocoa acreage over the past eight years. According to Bloomberg, the state-run Cocoa Development Project expects next year’s harvest to increase by 13 percent. The expansion of cocoa is an attempt to diversify its agricultural exports that currently depend mostly on coffee and tea. These commodities contribute 22% to the GDP.
The total is still a miniscule 17,000 tons. But the trend is upward and the country expects to reach 50,000 tons by 2015/16. By comparison, the Côte d’Ivoire exported 1.2 million tons last season.
Ghana Secures $1.5 Billion for 2010/11 Cocoa Harvest
In what has become an annual ritual, Ghana’s Cocoa Board (COCOBOD) managed to secure a $1.5 billion financing facility for the 2010/11 cocoa harvest. In a sign that international credit markets have eased up, the financing facility was oversubscribed. Banks from around the world actually offered $1.8 billion while COCOBOD was only seeking $1.2 billion. In light of the easy credit, COCOBOD increased the facility to $1.5 billion. In another piece of good news, the interest rate dropped from 250 points to 90 points over LIBOR.
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Hershey and Social Responsibility
Last week, the Hershey company released its Corporate Social Responsibility Report. Like many of such reports, it’s full of pretty pictures and statistics. What it does not mention is that Hershey is the only large chocolate maker in the US which has not yet participated in some form of third party certification for sourcing its cocoa. I’m not talking fair trade here, I’m talking any form of third party certification.
The folks at the International Labor Rights Forum have released their own report and it highlights four areas in which Hershey should make dramatic changes:
- Sourcing – Hershey has no system in place to ensure that its cocoa is not produced with abusive child labor;
- Transparency – Hershey does not reveal its cocoa suppliers, making verification impossible;
- Greenwashing – Hershey points to is donations, but, again, there’s not system in place to address child labor;
- Certification – Hershey has refused to enter into any certification, only a few of its Dagoba line bars are certified.
Given its long history of concern for working people and the social conscience of its founder, it remains a puzzle why Hershey is not doing the right thing when it comes to sourcing cocoa from certified reputable sources.
