Law Pressures Already High Cocoa Prices

A new European Union law that seeks to protect the world’s rainforests that have been affected by land expansion because of cocoa, palm oil, coffee production, and cattle, has compelled farms to invest in technology to meet its requirements, reports The Wall Street Journal.

The EU is the largest chocolate market, importing over half of the world’s cocoa beans. The law will also apply to global brands including Mars and Nestlé, according to the report.

Beginning December 30, chocolate makers that sell or produce products in the EU will have to show that the cocoa they use wasn’t grown on land cut from forests since the end of 2020, according to the report. This requires the cocoa to be linked to the GPS coordinates of the farm where it was harvested.

“This regulation will have a cost,” said Michel Arrion, chief executive of the International Cocoa Organization, which represents 52 cocoa-importing and exporting countries. “There will be a lot of documentation and bureaucracy.” Arrion gave the warning during a recent global conference in Brussels wherein industry groups urged the EU to delay the new law’s implementation.

Cocoa prices have recently spiked as a result of supply chain constraints, difficult weather conditions, and a persistent disease affecting crops called black pod disease. Full Story (Subscription Required)