The world’s largest producers of cocoa, Ivory Coast and Ghana have cancelled sustainability schemes organised by US-based chocolate manufacturer, Hershey.
Both countries accused the company of avoiding the payment of a cocoa premium, aimed at improving the financial state of farmers in their countries.
According to Reuters, both countries found Hershey demanding very high volumes of physical cocoa on the ICE futures Stock exchange. The countries, who produce 2/3rd of the world’s total cocoa said the company did that to avoid paying the premium, called the living income differential (LID).
The countries have also accused Fuji Oil Holdings of playing a part in helping Hershey in the schemes.
The schemes, according to the chocolate manufacturers are to protect cocoa of any environmental and human rights abuses, meaning it was rightly sourced and is devoid of any problems that will affect its global sales. The company added that by the West African giants’ disruption of the schemes, farmers may not be able to get premium on their products again.
Hershey is the manufacturers of Hershey’s Kisses and Kit Kat and source for their cocoa mainly from Ghana and Ivory Coast.
Hershey recently entered into a deal to make physical cocoa available at the ICE Futures exchange. This is expected to reduce demands in cocoa from Ghana and Ivory Coast and also avoid the premium charged by the government.
Last year, the Ghanaian and Ivorian governments set the LID for cocoa at $400 a tonne. This is to ensure that farmers make as much money as possible but the harsh realities of the coronavirus pandemic have dealt sales a huge blow.
“The Cocoa Merchants Association of America (CMAA) is condoning and conniving with American companies against poor West African cocoa farmers”, regulators in both countries said.
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