Building on over a decade of experience in sustainable cocoa, Federated Commodities Ltd through our Sustainability Department is finding new opportunities for investment. As a commodity, cocoa represents a very interesting target and we want to share our experience in the sector and why we feel there is significant opportunity here.
Demand for cocoa is growing, beyond knowing this from our own interest in consuming chocolate, we can see it in the numbers.
The cocoa supply chain faces a number of economic, social, and environmental challenges—creating potential challenges for the chocolate and beverage industry. Understanding these issues and how to address them are the first steps to realizing significant opportunities for both innovation and strategic capital investment in the sustainable cocoa industry.
More than 70% of the global supply of cocoa comes from West Africa, however, in recent years this region has experienced a 2% annual decline in production. This is the result of aging cocoa crops, lower productivity due to underinvestment, and poor agricultural practices. In addition, child labour is an entrenched problem, which creates real supply chain risks for the largest chocolate companies in the world. These challenges are exacerbated by the fact that small-holder farmers, who typically own a few hectares of land, are responsible for the vast majority of cocoa production, so it is much more difficult to manage how they operate.
To address these issues, many of the world’s largest cocoa companies have joined forces through programs such as CocoaAction. Created by the World Cocoa Foundation, CocoaAction aims to achieve sustainability in cocoa by supporting communities that rely on cocoa for their livelihood. Commitments made by some of the world’s largest chocolate companies for 100% sustainably sourced cocoa will ensure the demand for sustainable cocoa continues to grow.
The demand for sustainable cocoa will be the core driver for change in the industry and will ultimately encourage its small-hold farmers to adopt more sustainable and ethical practices.
Federated Commodities Limited has been—and will continue to be—at the leading edge of sustainable cocoa development
Through our Department, FEDCO Sustainability, we have strong track-record in developing sustainable cocoa projects in Ghana. This is a country where the environmental conditions for growing cocoa are excellent, the investment climate is strong, and labour practices are ethical. FEDCO is actively leveraging our experience by directing investment capital into developing sustainably-managed high-quality cocoa farming & production. Both fine and flavour cocoa are in high demand by chocolate manufacturers internationally, and priced at the premium end of the market.
If you are interested in investing in sustainable cocoa opportunities, or would like to learn more, please contact FEDCO Sustainability Department
