RELIABLE AND READY COCOA SUPPLY CHAINS

After a turbulent year and as the cocoa sector faces numerous challenges, our traders and Sustainability team travelled to Peru and Ghana to ensure that our entire supply chain is in good working order and capable of exporting cocoa that meets the new European Union requirements under the best conditions.

PERU

In 2024, cocoa cultivation in Peru has experienced significant growth, with the country establishing itself as a key producer of fine and aromatic cocoa, highly valued in international markets. Producing approximately 70,000 tons annually, Peru stands out for the quality of its beans, often derived from ancient varieties such as Criollo and Trinitario.

However, Peruvian producers face several challenges. Climate change impacts, such as high temperatures and irregular rainfall, are affecting yields. Additionally, small-scale farms, which dominate the sector, often struggle with limited access to financing and modern technology.

Our Cocoa Trader and Sustainability Manager travelled to Peru to visit our local partners and farms, assess logistical capacity, and discuss the protocols in place to ensure strong cocoa traceability.

Quality

Quality is at the heart of our commitments. We have ensured that our partners apply the best agricultural practices to maintain both the health of cocoa trees and high yield levels. Our partners in Peru receive support from agronomists who monitor farms and provide tailored recommendations to producers.

These experts play a key role in promoting agroforestry practices, ensuring adequate shade, natural soil enrichment, and income diversification for farmers. These sustainable methods help optimize yields while preserving the environment and local biodiversity.

Logistics

Cocoa logistics are crucial to maintaining product quality and competitiveness in international markets. Farms, scattered throughout the country, must contend with challenging terrain, sometimes inadequate infrastructure, and climate-related disruptions that complicate access to farms and collection sites.

However, our partners in Peru have successfully established an efficient local supply chain, ensuring smooth and secure cocoa collection while minimizing risks such as excessive fermentation, thus guaranteeing optimal preservation of the beans.

Traceability

Although the enforcement of the European Union Deforestation Regulation (EUDR) has been postponed, we remain committed to staying prepared. It has always been essential for us to equip ourselves with the necessary tools and implement processes tailored to each origin to provide a high level of certainty. Our Peruvian supply chain is particularly well-prepared and equipped with strong technological capabilities.

These locally implemented procedures, combined with satellite analysis conducted in partnership with Picterra, allow us to precisely monitor the plots from which our cocoa batches originate, ensuring our clients’ supplies comply with regulations.

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GHANA

In 2024, cocoa farming in Ghana has undergone a critical period, marked by structural and financial challenges. Despite its status as a major player – representing about 15% of global production – the country is facing declining yields due to climate change, cocoa tree diseases, and deforestation. Furthermore, the gradual withdrawal of financial support by the Ghana Cocoa Board (COCOBOD) is creating additional uncertainty for the entire sector.

Our Cocoa Trading, Sustainability and Shipping Teams, travelled to Ghana during the shipping season to ensure that our Ghanaian supply chain was fully operational, both in terms of logistics and regulatory compliance.

Securing the harvest

The 2024/2025 harvest has begun recently. The crop is estimated at 650,000 metric tons, thus the 2024/2025 season appears to be better than the previous one. However, last year’s shock has not yet been fully absorbed, and demand remains high, with prices around USD 9,500 per metric ton.

Breaking with a 32-year tradition, COCOBOD has decided not to rely on international loans to finance the cocoa season. This decision, aimed at reducing interest costs estimated at around USD 150 million, is forcing the sector to adopt a new approach by shifting the financial burden onto traders and Licensed Buying Companies (LBCs), fundamentally altering the sector’s financial balance.

In this particular context, we met with our Ghanaian supply chain partners, accompanied by our local representative, to secure client volumes from the beginning of the harvest.

We observed and validated each step, from farm to container loading, ensuring the efficiency of the pre-financing mechanisms we support alongside our LBC partners, some of whom we have been working with for over 12 years.

Traceability

Ghana’s cocoa sector has successfully structured itself, establishing an effective data collection system. Thanks to a high level of digitalization, our LBCs can accurately trace the origin of cocoa batches, meeting the growing regulatory demands of the European market.

Our partner Picterra, a specialist in satellite analysis, has enabled us to implement a deforestation risk monitoring solution. To date, over 98% of our Ghanaian supply chain has been assessed as compliant with European regulations, ensuring an excellent level of preparedness for the enforcement of the EUDR.

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