The Cocoa Butter Situation

Cocoa Butter Situation

Hello sweeties, as a business who practices transparency from practice to product, I would like to share with you some information that one of my regular suppliers has highlighted during our conversations. Lately, I and other businesses who use cocoa butter have notice the scarcity of good quality cocoa butter and extortionate prices for the raw material. I was saddened to hear about the devastation of the latest cacao crops and how it affects the farmers livelihoods.

I want to give you a glimpse into what goes on behind the scenes of business that relies on international raw materials to create produce. I always want to know the origin and process of my ingredients, who is involved and how it affects the farmers and my suppler is also very committed.

The following is quoted and kindly offered to share from my supplier:

“The Cocoa crop in West Africa has been affected by impact of climate change and the exceptionally unseasonal rainfall in the region which has accelerated the spread of a fungal black pod disease that has decimated the growth on new cocoa pods. The reduced crop in Ghana and Ivory Coast has contributed to some of the price increase, but the main driver of the price surge can be blamed on the Large Commodity companies who supply the Food and Cosmetic markets."

“These companies have forced prices ever higher, as many of the large chocolate companies like Cadbury, Hershey, etc. let their stocks run down before the 2023 crop commenced. Once the panic buying started, companies like us had their orders cancelled under 'force majeure' and we have to buy at these crazily high prices. We hope to have Organic Certified Unrefined and Organic Certified Deodorised on the website by the end of the coming week, but prices will be way higher. We have rejected the conventional Cocoa Butter being offered as it is more like Lard, it is so pale and white. This is an ultra-refined product with very little cocoa content, so we won't touch it, plus I believe the stuff on the market is quite old and selling around £ 20-00 kilo. We have been advised the situation will take a few seasons to improve, assuming they can get on top of the fungus meantime.”

“It is a very bad situation. The growers already get very little reward for their beans, and very little of the inflated margin works it way back through the supply chain. It is typical of the commodity industry to behave like this. The Ivory Coast Government raised the 'farm gate prices' by 11% for 23/24 crop season, but Farmers still only get US$ 1.62 per kilo of beans. When you consider that Cocoa prices are at an historic 46 year high, the portion of the profits that the farmers in Ivory Coast get is pitiful. The Ghanian Government have set a higher price for their farmers, on the basis that Ghanian Cocoa is a superior quality, but again, the reward is disproportionally low.”

“In recent years, the Governments of both Ghana and Ivory Coast have combined their efforts to secure a larger portion of the added value by setting up an initiative called the ‘Living Income Differential’ where a premium of $400 per tonne is added on to cocoa prices, (40 cents a kilo). Ghana are also pushing ahead by further increasing farm gate prices there, and last month reached a 50% increase. This is an attempt to prevent the illegal sales through smuggling of the beans, which reportedly reached 150,000 tonnes (that's 150 million kilos of beans) in 2022 / 2023 crop season. Unfortunately, a number of the major Chocolate / trading companies are not supporting the Government campaigns and instead purchase on the International Commodity Exchange Stock market. I don't understand their thinking and they seem to be driven by short term gain.”

To limit the use of cocoa butter and avoid more rising costs I will be formulating the soap bars with my original olive oil formula I will continue to add organic cocoa butter to our Botanical Skin Butters. The price per kilo of cocoa butter is now £60 per kilo. I have had to push my prices up to £15 for Botanical Skin Butters but it is still an absolute steal for such a high quality skin product. My certificates and cosmetic safety reports for soap bars allow me to create many formulas within it’s wide range but the Botanical Skin Butter has fixed assessments and the properties of the cocoa butter in these products are of paramount importance.

Thank you for reading ~ your chief savonnière, Michelle x