Relations are calming down between Ivory Coast and tablet manufacturer Hershey after weeks of tension. Hershey reiterated its “unfailing” commitment to the $400 per ton bonus which improves planters' remuneration.

De-escalation after tensions. For the past few weeks, Ivory Coast and Ghana have been waging a campaign against chocolate giants including Hershey, Mars and Olam. Producing countries accused them of circumventing the mechanisms negotiated in 2019 to better pay growers.

Côte d'Ivoire has even threatened the American confectioner Hershey to exclude it from certification programs. These labels are valuable because they guarantee that the cocoa has been produced under sustainable conditions and without the use of child labour. They are essential for selling chocolate bars on the American and European markets.

Relations between Hershey and the Ivory Coast, however, seem to be calming down. In a letter to the Ivorian authorities, the American confectioner recalled its "unfailing" commitment to the decent income differential (DRD), a premium of 400 dollars per ton above international prices, which makes it possible to increase the sums paid to growers. As a result, the Ivorian regulator decided not to suspend ethical certification programs.

Supply on the futures market

According to the World Bank, 80% of growers live on less than $3 a day. Producing countries capture only 5% of this market estimated at 100 billion dollars, while consuming countries collect 15% just from taxes on chocolate bars.

Côte d'Ivoire and its neighbor Ghana, which alone produce 60% of the world's cocoa, have therefore joined forces to set up the DRD since October, a premium of 400 dollars above international prices. The chocolate maker Hershey, however, had bought large quantities of cocoa on the New York futures market instead of sourcing as usual directly from producers. Hershey was thus suspected of getting rid of the DRD, because the cocoa price in New York does not include the premium.

A committed sector

Accra and Yamoussoukro then saw red and multiplied the attacks. Taken by surprise, the entire sector was forced to react and reaffirmed its commitments in favor of producing countries.

The chocolate union in France has thus underlined that the sector has long been committed to a sustainable and ethical approach and has supported the DRD from the start. “We cannot talk about sustainability and at the same time be against the decent income differential,” notes Gilles Rouvière, general manager of the union, who regrets the stigma cast on the entire sector.

A market under pressure

The de-escalation may also be explained by the fact that Côte d'Ivoire is having difficulty selling its cocoa. 15% of his main harvest has still not found a buyer, whereas this part is usually sold in advance. To attract buyers, Côte d'Ivoire has also lowered the premium on high quality beans. "This neutralizes the weight of the DRD," commented one at Commerzbank.

Beyond the dispute between chocolate giants and producers, the cocoa market is under pressure due to the pandemic. Containment measures have led to a drop in chocolate consumption.