Ivory Coast and Hershey Kiss and Make Up in Cocoa Price Spat
Ivory Coast and Hershey Co. have resolved their differences over cocoa prices.
The West African country lifted an order to suspend Hershey’s sustainability programs following the Pennsylvania-based company’s “definitive” commitment to paying a premium slapped on cocoa to improve farmers’ income, according to a letter from the Ivorian regulator seen by Bloomberg.
The governments of Ivory Coast and neighboring Ghana had accused Hershey, the maker of Kisses, Reese’s and other chocolate treats, of trying to avoid the $400-a-ton premium by buying cocoa through the New York exchange. Hershey upended markets in November when it unexpectedly bought large amounts of cocoa through futures contracts, roiling prices.
In a statement late Saturday, Hershey said it has been paying the premium, known as the Living Income Differential, or LID, and continues to do so.
“Our sustainability programs complement and strengthen our shared efforts to positively impact cocoa-growing communities,” it added.
Ivory Coast -- the world’s biggest producer of the chocolate ingredient -- and Ghana said in a Nov. 30 letter that it was suspending Hershey’s ethical cocoa programs and those third party companies ran on behalf of the chocolate maker.
Ivory Coast said the programs, which allow traders to certify that the cocoa beans haven’t been grown in protected forests or using child labor, benefit only a small number of farmers.
Hershey said it recognized the importance of the premium in improving the lives of farmers and said it was “eager to continue and extend our sustainability programs so farmers receive the benefits provided by our on-the-ground programs as well as the price premium for certified cocoa and the LID.”
In the letter seen by Bloomberg, Yves Kone, the managing director of the Ivorian regulator, said the suspensions in his country would be lifted on Dec. 4 following Hershey’s “definitive” commitment to pay the premium. The letter was confirmed by Kone and a spokeswoman for the regulator.
Ghana has not taken any decision yet on the suspension, a spokesman for the Ghana Cocoa Board said late Saturday.
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