Securing Organic Cocoa Supply Chains. How regulation and market turmoil are reshaping organic cocoa and other smallholder value chains

Summary

Europe’s organic cocoa sector is recovering from the severe 2023-2024 supply shock, yet key indicators remain below pre-crisis levels, including the number of certified producers and the diversity of the producer base. This paper examines the structural challenges affecting the sector during its recovery, with particular attention to the implementation of the new EU Organic Regulation, persistent price volatility, climate-related production risks, and compliance requirements associated with the EU Deforestation Regulation (EUDR). Drawing on sectoral evidence, the analysis shows that these factors have substantially increased certification, monitoring, and administrative costs for producer organisations, while simultaneously constraining their access to finance. The findings indicate a growing reliance on the Fairtrade Premium to cover organic compliance and certification costs, replacing the role traditionally played by organic price premiums. This shift raises concerns regarding the economic sustainability of organic cocoa production and the long-term resilience of certified supply chains. The paper concludes that maintaining and expanding organic cocoa production will require more equitable organic price differentials, improved distribution of compliance costs across supply-chain actors, and stronger risk-sharing mechanisms to support producer organisations facing increasing regulatory and market pressures.