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• The global cocoa price has slumped by around 80% from its peak in 2024, making it difficult for West Africa's farmers to comply with the EU's anti-deforestation law.
• Ghana's finance minister, Cassiel Ato Forson, announced a nearly 30% cut in wholesale prices that farmers receive, exacerbating the challenges posed by the price collapse.
• Industry experts estimate that less than half of Nigeria's national production could meet the EU requirements when the rules take effect for large operators at the end of December 2026, and for small enterprises by June 2027.
• The EU's anti-deforestation law requires companies to ensure that their cocoa beans are sourced from areas where deforestation has been minimized, and this will have a major impact on farmers and industry groups in West Africa.

The price collapse has also had a ripple effect on the wholesale prices that farmers receive. Ghana's finance minister, Cassiel Ato Forson, announced a nearly 30% cut in the wholesale price from around €290 per 64-kilogram bag to €210.

A significant slump in global cocoa prices has left West Africa's farmers struggling to comply with the EU's anti-deforestation law. The price of a tonne of cocoa has fallen by around 80% from its peak in 2024, making it increasingly difficult for farmers and industry groups to bear the costs of new measures to trace where cocoa beans were produced.

The price collapse has also had a ripple effect on the wholesale prices that farmers receive. Ghana's finance minister, Cassiel Ato Forson, announced a nearly 30% cut in the wholesale price from around €290 per 64-kilogram bag to €210. This cut is particularly concerning for Ghana, which is the world's second-largest producer of cocoa and has a significant debt owed by COCOBOD to its farmers.

Despite the challenges posed by the price collapse, authorities are still rolling out tracing regimes across the four West African states that produce around 75% of the world's cocoa. However, industry experts estimate that less than half of Nigeria's national production could meet the EU requirements when the rules take effect for large operators at the end of December 2026, and for small enterprises by June 2027.

The EU's anti-deforestation law, known as the EUDR, entered into force in June 2023, but its compliance obligations have been postponed. Large operators and traders must comply by December 30, 2026, and small enterprises by June 30, 2027. The law requires companies to ensure that their cocoa beans are sourced from areas where deforestation has been minimized. This means that farmers and industry groups must implement new measures to trace where their cocoa beans were produced.

The tracing regimes being rolled out across West Africa will involve a range of activities, including mapping land use, monitoring forest cover, and verifying the identity of farmers. However, the cost of implementing these measures is significant, and many farmers are struggling to bear the burden.

The EU's EUDR is part of a broader effort to address deforestation and promote sustainable agriculture practices. The law has been welcomed by environmental groups, but it has also raised concerns among some industry stakeholders who fear that it could lead to higher costs and reduced competitiveness.

The EU's anti-deforestation law is a significant development for the global chocolate market, which is worth around $180bn. The law requires companies to ensure that their cocoa beans are sourced from areas where deforestation has been minimized, and this will have a major impact on farmers and industry groups in West Africa.

For lawyers advising clients in the West African cocoa sector, the EUDR presents a range of challenges and opportunities. On the one hand, the law provides a framework for promoting sustainable agriculture practices and addressing deforestation. On the other hand, it also raises concerns about compliance costs and competitiveness.

As the EUDR's compliance obligations approach, with large operators and traders required to comply by December 30, 2026, and small enterprises by June 30, 2027, farmers and industry groups will need to be prepared to implement new measures to trace where their cocoa beans were produced. This will require significant investment in tracing regimes, mapping land use, monitoring forest cover, and verifying the identity of farmers.

Lawyers advising clients in the West African cocoa sector should watch for potential compliance exposures and advise their clients to prepare for the EU's deforestation regulation, which is set to take effect at the end of December.

Source: Original reporting via [Source]