Like Chocolate? Who doesn’t? But expect to pay more. There’s two reasons, and one reason will spread to other crops, even minerals.
A European Union law that aims to make chocolate more sustainable has left farmers racing to map their plots.
The Wall Street Journal reports Chocolate Prices Have Soared. A New Law Threatens to Keep Them High.
A new European Union law seeks to protect the world’s rainforests, which have shrunk dramatically in recent decades due to the expansion of land used to grow cash crops like cocoa, palm oil and coffee, or to herd cattle. Because the EU is the world’s largest chocolate market, importing more than half of the world’s cocoa beans, the law will also apply to global confection giants like U.S.-based Mars, the maker of M&M’s, or Switzerland-based Nestlé.
Starting from Dec. 30, chocolate makers that sell or produce 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. In practice, it means that each morsel of cocoa that makes its way into the bloc will need to be linked to the GPS coordinates of the farm where it was harvested.
The EU initiative is part of a growing movement to make raw materials—including agricultural products and minerals used in smartphones and electric cars—traceable, with the goal of reducing the potential harm they inflict on the environment and local populations.
By 2022, the 36 signatory companies, which account for 85% of global cocoa use, said they had mapped 567,264 farms in Ivory Coast and were able to trace about 85% of their directly sourced beans in Ivory Coast and Ghana.
That effort doesn’t translate easily to the EU initiative. There is no central database for the various mapping initiatives. Some farms may have been mapped multiple times while others have never had their coordinates recorded.
Another snag is the level of detail of the required GPS longitude and latitude coordinates. The EU deforestation legislation requires cocoa farms to provide GPS coordinates that have at least six digits after the period, such as 6.113647, -3.850584. Previously, farmers and organizations under the Rainforest Alliance’s certification program shared GPS coordinates with only four decimal points.
That means potentially tens of thousands of farms that have been mapped will have to be mapped again—quickly. “We did this job in three years,” said Jean-Marc Gouda, a team manager at the Rainforest Alliance. “The challenge is to tell them to do it again in six months.”
The EU also requires larger farms to submit GPS coordinates of their entire borders, rather than just a single point within the farm, and provide a digital representation of the farms’ boundaries. Officials say they might use satellite images and on-the-ground inspections to check the supplied data is accurate.
Many farmers are only now finding out about the new EU requirements.
Even if the mapping is completed in time, the system where companies will need to upload the GPS data is still under development, raising concerns over a last-minute scramble to log millions of coordinates.
“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.”
For consumers, the EU law couldn’t have landed at a worse time. Unseasonably hot and dry weather during the rainy season and wet weather during the dry season as well as cocoa-tree diseases have hit harvests across West Africa, the source of 70% of the world’s cocoa beans. Stockpiles this season are expected to be the lowest in 45 years, as demand outstrips supply for a fourth consecutive season.
Why Stop With Cocoa?
Well, they won’t. This idea may rapidly spread to coffee, sugar, and bananas.
And why not platinum, silver, and the entire gamut of rare earth minerals? Why not cows?
I fear we will need to eventually track everything.
California Governor Escalates the War on Gasoline Impacting Neighboring States
Back in the states, California Governor Escalates the War on Gasoline Impacting Neighboring States
You can agree or disagree with the goals as well as the means to achieve them. For the record, I think saving rain forests is a good idea.
The war on petroleum and especially natural gas isn’t a good idea at all right now. Phasing out coal for natural gas is a nice step that reduces most of the real pollution.
Regardless, there is a cost to all of this, even if you agree with it.
Expect More Inflation No Matter Who Wins the Election
The deficits are already a huge Congress cannot restrain itself ,
For discussion, please see Expect More Inflation No Matter Who Wins the Election
For many reasons, the Fed will struggle to contain inflation. This is part one on the Fed’s struggle. It covers deficit spending and interest on the debt.
Dear Jerome Powell, Is Everything Under Control?
The US stock markets are all at record highs, gold is at a record high, and silver is at the highest price since 2013. Welcome to the everyone wins market, no craps allowed.
On May 17, I asked Dear Jerome Powell, Is Everything Under Control? Spotlight Gold and Silver
Congratulations to silver bulls, copper bulls, gold bulls, S&P 500 bulls, Nasdaq bulls, Dow bulls, and US housing bulls?
Did I leave anything out?
Add trade wars to the mix.
The market does not believe everything is under control.
Neither do I.
As a chocolate enthusiast, I find it disappointing that the price of chocolate is skyrocketing. While I support sustainable practices, the impact on consumers like me is significant. I hope this EU law will lead to positive changes in the cocoa industry without making our beloved treat unaffordable.