(Bloomberg Markets) -- Ghana, the second-biggest exporter of cocoa beans, is facing a problem many would’ve thought impossible: you can have too much chocolate.
The country has reaped its largest-ever cocoa harvest, thanks to favorable weather and higher pay for farming the beans. Yet at the same time, the coronavirus pandemic, which shut down marketplaces and airport gift shops around the world, has weakened demand for chocolate.
Adding to the glut, the nation’s cocoa regulator, the Ghana Cocoa Board, improved yields by distributing free drought-resistant seedlings and promoting better farming practices, including hand pollination.
This year was supposed to mark the start of a more sustainable era for cocoa farming in Ghana and Ivory Coast, the biggest cocoa exporter. The West African nations, which grow almost 70% of the world’s beans, introduced a so-called living-income differential, aimed at boosting farmer pay, at the beginning of the 2020-21 season. The premium adds $400 to every ton of cocoa sourced from their countries.
Read More: World’s Top Cocoa Grower Says Farmer Premium Is Here to Stay
While some global confectioners have publicly insisted they’re committed to paying the LID despite falling demand and revenue, West African regulators say certain buyers are trying to make up for it by cutting the “country premium” they pay in Ghana and Ivory Coast. And lower rates are upsetting the system that’s allowed them to increase farmers’ income.
The success of the LID now depends on how much value sustainability continues to add, as well as the world’s hunger for chocolate.
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