The International Institute for Sustainable Development has launched its second report on the sustainable commodities market, this time covering the cocoa sector.
With the rapid proliferation of voluntary sustainability standards (VSSs) in the cocoa sector, the volume of sustainably produced cocoa is growing faster than conventionally produced cocoa, in addition to signs of growth in VSS-compliant production among what the IISD categorises as ‘Low Human Development Countries’ (LHDCs). This is according to a new report released by the IISD in late November.
While conventional production showed a slight decrease between 2008 and 2016, VSS-compliant cocoa experienced a significant compound annual growth rate (CAGR) of about 46 per cent, thus bringing the volume of sustainable cocoa up to in excess of 25 per cent of global production. In four LHDCs, the CAGR during this period was up by at least 25 per cent.
Despite the projected growth of the sector driven by increased demand for cocoa-based products, including premium and sustainably-sourced cocoa, the IISD said there are several risks on the cocoa supply side.
Market price volatility, income disparity across the value chain, reduction in yields (due to the age of many cocoa trees), and the effects of rising temperatures in producing countries are among the challenges that need to be addressed.
“Coordinated efforts are needed between industry actors, including governments, standard-setting bodies, development organizations and private companies to ensure that the benefits arising from continued growth in cocoa demand are equitably shared across the value chain,” the IISD said, “and that expansion of the sustainable cocoa sector itself continues.
“These efforts and initiatives are crucial as cocoa is an essential source of income, providing livelihoods for an estimated 40 to 50 million people, mostly in developing countries, including 16 LHDCs.”
Given the sector’s continued growth, there are promising signs of expansion of VSS-compliant cocoa production among countries that are already producing the crop.
“Among LHDCs, those with the most potential for maximizing sustainable development outcomes via this expansion are Côte d’Ivoire, Nigeria and Togo, based on their share of total cocoa production, existing VSS presence and their Human Development Index (HDI) value,” said Vivek Voora, IISD Associate and lead author of the Global Market Report on cocoa.
“Papua New Guinea, Uganda and Guinea are other notable prospects for expanding VSS-compliant cocoa production with potential for sustainable development outcomes,” he continued.
The IISD said that, if properly implemented as part of broader sustainable development strategies, VSS can be a catalyst to improve the livelihoods of cocoa farmers and contribute to poverty alleviation in cocoa-producing countries regardless of their development status.
The cocoa report is the second in the Sustainable Commodities Marketplace Series from IISD, which presents sustainable production and consumption market information on agricultural commodities to foster transparency, knowledge and strategic decision making for sustainable development.
The first report, on coffee, was presented in June, and future reports will focus on the production of bananas, cotton, palm oil, soybeans, sugar and tea.