The creation of the Consultative Board on the World Cocoa Economy (hereafter referred to as The Board) was one of the major innovations of the International Cocoa Agreement, 2001.
Mandate
The Board is an advisory body to the International Cocoa Council, whose mandate is to provide advice to the Council on key challenges affecting the world cocoa economy. Challenges include, but are not limited to:
In order to carry out its mandate, The Board maintains a close cooperation with the Council and its subsidiary bodies, as well as with various cocoa stakeholders at the international and national level to coordinate and implement activities.
Membership
The Board consists of representatives of cocoa stakeholders from private sector and civil society in exporting and importing countries, including national public-private platforms. In this regard, and to ensure that all relevant sectors are represented within the Board, the membership is divided between exporting/importing countries, and along the following categories:
The International Cocoa Agreement, 2010 establishes that Board members, and their alternates, will be appointed by the Council every two cocoa years. The latest appointment, for the period 2018/19 – 2019/20, established a parity of 50 members, 25 coming from exporting Member countries and 25 from importing Member countries.
Candidates for membership are designated by their national governments.
The ICCO constantly follows and analyses the world cocoa market. Each month, recent developments in the market are reviewed together with longer-term trends and forecasts. The findings resulting from these analyses are subsequently translated into recommendations for ICCO Member countries and other relevant stakeholders. The ICCO Secretariat carries out the following analyses.
The Monthly Review of the world cocoa market provides a regular update on the economic developments in the sector. The review mostly focuses on the evolution of international prices, on the changes in production, grindings, stocks and prices of semi-finished products, as well as the estimates for production and grindings for the current season. You can find the latest Monthly Review here.
The Quarterly Bulletin of Cocoa Statistics provides reliable data and long-term trends on the cocoa economy from 1960 onwards covering most cocoa producing and importing countries.
It is published in February, May, August and November, and contains the following:
As described in ICCO documents, in particular ‘Sustainable Cocoa Economy: a Comprehensive and Participative Approach’, achieving a sustainable cocoa economy requires taking into consideration the problems that affect the three pillars of sustainability: economic, environmental and social. Furthermore, among the various groups of stakeholders within the cocoa value chain, cocoa producers remain the weakest link and as a result face the greatest challenges.
The world cocoa economy is experiencing some issues that are threatening the sustainability of the cocoa sector. Firstly, the living income of cocoa farmers has not improved despite several initiatives taken to address the issue. Most cocoa farmers are still living below the poverty line with very low living standards. Furthermore, there has been a rise in environmental and social advocacy in commodity supply chains including cocoa. Challenges regarding deforestation, labour and social ethics in the cocoa sector are influencing consumption patterns for cocoa and chocolate products.
During the first World Cocoa Conference, which took place in Abidjan, Côte d’Ivoire in 2012, all the major cocoa stakeholders adopted the Global Cocoa Agenda – a roadmap towards achieving a sustainable world cocoa economy.
Within the Global Cocoa Agenda (GCA), four overarching strategic challenges were identified: sustainable production, sustainable industry chain, sustainable cocoa consumption, and strategic management. For each of these challenges, the GCA outlines a range of recommended actions. Since its adoption, the ICCO has assisted its Members in adopting the recommendations highlighted in the GCA. One of the main objectives of the ICCO Secretariat latest 5-year Strategic Plan of Action (2019-2024) is to turn the ICCO into an organisation that contributes to the achievement of the Sustainable Development Goals (SDGs) and the objectives of the Global Cocoa Agenda while focusing on the economic and social sustainability of the cocoa supply chain, with a special emphasis on the living income of the cocoa farmers.
Sustainable cocoa production is of paramount importance to the ICCO. Indeed, assisting Member countries in achieving the 3 pillars of sustainability – economic, social and environmental – in the production of cocoa is one of the ICCO’s main missions .
Cocoa production is predominantly carried out by smallholders, as more than 90% of world cocoa farmers have plots of land of between 2-5 hectares. Furthermore, cocoa farmers remain the weakest link in the value chain. As a result, farmers remain in poor living conditions, or near poverty, without access to basic social services, and without the tools or incentives to implement environmentally-friendly production practices.
While there is a clear trend of increasing cocoa production, yearly outputs are extremely volatile. This is typically the result of unexpected changes in weather conditions as well as the spread of pests and diseases affecting certain production areas. Moreover, part of this volatility also comes from unexpected overperformance or underperformance in production, due to the limited knowledge on the cocoa resources in cocoa producing countries.
This lack of knowledge makes it difficult to properly manage and estimate production, while also limiting the development of rational policies in cocoa producing countries. Hence, the ICCO encourages producer countries to carry out inventories of their cocoa resources to take better stock of their cocoa sector.
The ICCO also supports its Member countries in the development and implementation of National Cocoa Development Plans (NCDP) – aligned with their national agricultural plans. Having a NCDP allows countries to properly assess their strengths and limitations, and helps coordinate stakeholders in the sector towards achieving a common goal and objectives.
An overview of trends in production is included in the Quarterly Bulletin of Cocoa Statistics, which can be accessed here.
Cocoa pests and diseases have a very negative effect on yearly cocoa production volumes, requiring much more natural resources (land) than would normally be the case without such losses. Resistant planting material can greatly reduce crop losses, as can best practices in farming techniques. Special efforts appear to be essential in order to prevent and contain the international and global spread of cocoa pests and diseases. For these reasons, the Secretariat continues to be involved with a number of stakeholders in developing projects aimed at dealing with the spread of different pests and diseases in cocoa producing regions.
There are several issues affecting the sustainability of the world cocoa economy. The value cocoa farmers get for their cocoa within the value chain is unsustainable as it does not allow them to achieve a decent standard of living for them and their families. This has created a crisis on the production side due to farmers not properly taking care of their farms and younger generations of farmers leaving the countryside to migrate to cities in search of jobs.
Currently there are several efforts, led by various stakeholders in the cocoa sector, to determine what the living income for cocoa farmers should be, how to calculate it, and ultimately how to apply it within the cocoa value chain.
Poverty among cocoa farmers in certain regions has led to other forms of sustainability issues, such as cases of child labour in cocoa farms, or deforestation linked to the expansion of cocoa production. It is worth noting that these issues do not affect all cocoa producing regions, but rather are focalized on certain areas where efforts need to be increased.
At a global level, cocoa production is not the main driving force behind global deforestation. However, in recent years, smallholding cocoa farming has attracted the spotlight for being the driver in some deforestation hotspots. And this development occurred despite the presence of certification schemes which were created to deliver a sustainable cocoa production.
During 2018, the issue of deforestation gained momentum, capturing the attention of governments and lawmakers. Several European governments called for concrete actions, especially to address the deforestation in the cocoa sector. The European Parliament held a hearing on “Cocoa and Coffee – devastating rainforests and driving child labour” on 11 July 2018, and a brainstorming session on “Developing legally binding approaches to address child labour and deforestation in EU cocoa imports” on 21 November 2018.
In December 2018, the European Commission (EC) initiated a consultation of citizens and stakeholders on the broad issue of deforestation and forest degradation. During this consultation process, the ICCO Secretariat encouraged its Member countries to provide feedback on the EC’s initiative, and also provided feedback directly to the initiative. Furthermore, during the 99th statutory session of the ICCO Council, in April 2019, Members drafted a Communiqué as a response to the EC initiative.
In July 2019, the European Commission adopted a Communication on Stepping up EU Action to Protect and Restore the World’s Forests, with a coherent and comprehensive policy framework to tackle deforestation and forest degradation in commodity supply chains.
Sustainable cocoa consumption complements sustainable cocoa production, as it aims to secure a steady increase in cocoa and chocolate consumption around the world, mirroring increases in sustainable cocoa production. Strategies for a sustainable cocoa consumption should meet evolving expectations and new consumers trends in traditional/mature markets as well as in emerging markets and origin (producer) countries. Furthermore, sustainable cocoa consumption should also focus on promoting consumption of new and innovative cocoa-related products related to beverages, cosmetics, pharmaceutical, etc.
The ICCO regularly analyses trends in consumption of the chocolate confectionery market as part of its Quarterly Bulletin of Cocoa Statistics; the latest and past editions of this periodical are available in the Quarterly Bulletin of Cocoa Statistics shop.
More short-term market analyses, concentrating on grindings, are available by clicking on the Statistics tab (Grindings, Monthly Review of the cocoa market).
Cocoa quality is a very important aspect in the production of cocoa, as higher quality can lead to much-needed increases in revenue for cocoa farmers. Cocoa producing countries in Latin America and the Caribbean, for example, receive high premiums for their cocoa, because of their various quality characteristics: Fine or Flavour varieties, participation in various certification schemes, organic practices or good post-harvest practices, among others quality standards.
For more information of Fine or Flavour cocoa, please follow this link.
A focus on increasing cocoa quality could be a defining factor for many cocoa producing countries, where the traditional practice has been to increase volumes of production in order to secure an income for the farmers. Increased cocoa quality could provide farmers with a better income, while at the same time curb the overproduction and oversupply of cocoa in the market, thus contributing to more stable international cocoa prices.
In recent years there have been efforts to recognise cocoa quality and provide incentives to farmers and governments to emphasise quality over quantity. The ICCO supported the creation of the Cacao of Excellence Program, which recognises, preserves and values cacao quality and flavour diversity, across the value chain through their Cacao Awards pillar. Efforts are currently undertaken by the program organizers, along with several international and regional bodies, to provide technical assistance to cocoa producing countries and regions to produce better quality cocoa and to participate in their awards program, in order to get international recognition.
There are also international efforts underway to develop international standards on cocoa quality and flavour. In 2015, a Working Group led by Cacao of Excellence was created for the development of International Standards for the Assessment of Cocoa Quality and Flavours. This Working Group, of which the ICCO Secretariat is a member, has been actively working on developing accepted, credible and verifiable protocols to assess cocoa quality and flavour and these will be published in the first Guide for the Assessment of Cacao Quality and Flavour in June 2023.
