Last June, European legislation came into force banning the sale within the EU of products that involve deforestation for cultivation in third countries, from Africa through Asia to South America. The aim is to force these states to halt the loss of biodiversity around the world, and so the law has been hailed as a success by ecologists. But the problem is that 350 thousand tonnes of coffee and cocoa stored in warehouses across the EU are now in danger of ending up in landfill.
The potential massive waste was condemned by the Intercontinental Exchange (ICE), one of the main trading venues for coffee and cocoa futures, and the International Trade Center, a joint agency of the United Nations and the World Trade Organization. According to ICE, 200,000 tonnes of cocoa and 150,000 tonnes of coffee beans are stored in warehouses at ports in Europe during the summer months. Under the new rules, much of this supply will be illegal: About 70% of the world’s cocoa comes from Ivory Coast and Ghana, where deforestation is widespread. The same should be true for the world’s largest coffee producers: Brazil, Vietnam, Colombia and Indonesia.
The law against deforestation now provides for a transition period until December 31, 2023. If the stored coffee and cocoa are released from the warehouses by this date, they can be sold in the market. The two organizations warn that they will be destroyed otherwise. Since they are generally long-lasting products, it can take up to 18 months to be released to the market. Therefore, the risk of being wasted is really high.
Major chocolate producers also shared the alarm: If stocks were destroyed, there would be serious knock-on effects for the industry, consumers and cocoa farmers, according to a Financial Times report. Matthijs de Meer, head of European affairs at the European Cocoa Association, warns that the “Easter eggs of 2025” may remain without cocoa.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
