Olam inks deal for purchase of 100, 000T of cocoa inclusive of farmers’ premium

WEST AFRICA – The Coffee and Cocoa Council (CCC) has signed a block deal with Global food and agri-business Olam International Limited for the sale of 100,000 tonnes of cocoa export contracts for the 2020/21 season that includes the living income premium, LID.

“I can confirm that we signed a block deal of 100,000 tonnes of cocoa export contract including the LID with Olam last week,” said a source at CCC.

ADVERT

Singapore-based Olam is the second largest cocoa buyer and exporter in Ivory Coast following Cargill with purchases estimated at 250,000 tonnes.

It also has processing plants in Abidjan and San Pedro, in the country’s south-west, with capacity of 86,000 tonnes and 75,000 tonnes respectively.

The company confirmed it had purchased cocoa, although it declined to specify the exact tonnage or timing.

“We share the belief of the governments of Ghana and Cote d’Ivoire that raising incomes and living standards for cocoa farmers is vitally important,” Manoj Vashista, global head of Olam’s cocoa beans business said.

“We can confirm that we have some time ago purchased significant quantities of cocoa from both Ghana and Ivory Coast for the 2020/21 season.”

Ivory Coast and Ghana announced in July that all cocoa purchases for the 2020/21 season must include a Living Income Differential (LID) of $400 a tonne in a bid to tackle pervasive farmer poverty.

The move was a major overhaul of how global cocoa was priced and buyers initially responded cautiously, with only a few deals concluded in the period immediately following the announcement.

Last week, in a joint statement, the two countries threatened to end cocoa industry certification and sustainability programmes in their countries if purchasers did not start buying LID contracts.

The threat was lifted after a meeting in Berlin last week attended by both chocolate makers and representatives from the West African neighbours.

Negotiations are underway to sign other block deals with members of the “big five” cocoa buyers and exporters, Cargill, Sucden, Barry Callebaut and Touton.

“The goal for us is to reach between 700,000 and 800,000 tonnes of sales at least before the end of this year,” said the ccc source.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.