Omanghana
West Africa’s cocoa industry is facing growing pressure as exporters and farmers race to comply with the European Union Deforestation Regulation, which is scheduled to take effect on December 30, 2026.
The regulation requires companies placing cocoa and other covered commodities on the European market to demonstrate that their products are not linked to deforestation and were produced in accordance with relevant laws in their countries of origin.
Although the policy is intended to protect forests and promote sustainable production, cocoa stakeholders warn that its traceability and documentation requirements could disrupt supplies, increase costs and exclude thousands of small-scale farmers from the European market.
West Africa produces approximately 70% of the world’s cocoa beans, with Côte d’Ivoire and Ghana accounting for the largest share. About two-thirds of the region’s cocoa exports are destined for the European Union, making compliance essential to the sector’s survival.
The industry is dominated by smallholders who often cultivate relatively small plots in remote areas. Nigeria alone has an estimated 300,000 cocoa farmers, most of whom operate on a small scale and have limited access to financing, technology and formal land documentation.
Under the EUDR, importers must conduct due diligence and provide geographic information showing where their cocoa was produced. Exporters must therefore trace beans through aggregators, warehouses, processors and shipping companies back to individual farms.
Creating such a system is particularly difficult in West Africa, where cocoa from numerous farms is often combined during purchasing, transportation and storage.
Many farms are located in communities with limited internet access, poor road networks and low levels of digital literacy. Some producers also lack recognized land titles or reliable records establishing the exact boundaries of their properties.
To comply with the regulation, companies must map farms, collect geolocation data, verify production areas and maintain digital records capable of demonstrating that the cocoa did not originate from recently deforested land.
These requirements are generating considerable costs across the supply chain.
One major Nigerian exporter reported spending between $30 and $70 for every metric tone of cocoa while mapping approximately 124,000 hectares of farmland over three years.
Large multinational companies may be able to invest in satellite monitoring, digital platforms and specialized compliance teams. Smaller exporters, cooperatives and individual farmers are far less capable of absorbing those expenses.
Industry stakeholders fear that the regulation could divide the cocoa market into compliant and non-compliant supplies. Farmers who have been successfully mapped and registered would retain access to European buyers, while those outside recognized traceability systems could be shut out.
Experts estimate that producers responsible for more than half of Nigeria’s cocoa output could initially struggle to satisfy the new requirements.
Côte d’Ivoire faces a similar challenge despite being the world’s largest cocoa producer. Only about half of the country’s output can currently be traced directly to its farm of origin, according to industry estimates.
The possibility of large volumes becoming ineligible for sale to Europe has raised concerns about stranded cocoa supplies.
Farmers unable to meet the requirements may have to sell into alternative markets, potentially at lower prices. Exporters could also face delays or rejection if they cannot provide the required documentation.
The regulation places much of the administrative and financial responsibility on producers and exporters in cocoa-growing countries, even though the final product is largely sold and consumed elsewhere.
If European importers and chocolate manufacturers refuse to absorb the additional costs, farmers and local companies could be forced to pay for compliance from already limited profit margins.
The situation could worsen existing inequalities within the cocoa sector. Farmers with access to organized cooperatives, international sustainability programs and well-financed buyers are more likely to be mapped and certified.
Independent producers in remote communities may be excluded simply because no company or government agency has invested in gathering their data.
The EUDR deadline is also approaching while West Africa’s cocoa industry confronts several other financial, environmental and operational problems.
In parts of Cameroon, farmgate cocoa prices have reportedly fallen by about half over the past three years. Lower prices reduce the money available to farmers at the same time they are expected to invest in farm mapping, record keeping and sustainable production.
Without sufficient income, producers may struggle to purchase fertilizers, pesticides, improved seedlings and protective equipment. They may also be unable to rehabilitate ageing farms or hire the workers needed for harvesting.
Financial bottlenecks are affecting the supply chain in Ghana and Côte d’Ivoire as well.
In Ghana, reported payment arrears to Licensed Buying Companies have disrupted domestic purchasing and aggregation. Some firms lack sufficient working capital to buy cocoa from farmers, transport it to warehouses and prepare it for export.
When payments are delayed, cocoa can remain at the farm level or in local storage facilities for extended periods. This raises the risk of deterioration, informal sales and smuggling into neighboring countries.
The introduction of new compliance expenses could deepen these liquidity problems if exporters and buying companies must invest in technology without receiving additional financing.
Production has also been affected by climate variability, ageing trees and disease.
Unpredictable rainfall, prolonged dry periods and excessive heat can reduce yields and damage cocoa pods. Farmers are also confronting cocoa swollen-shoot virus disease, which weakens trees and can eventually make affected farms unproductive.
Replacing diseased or ageing trees requires substantial investment, and newly planted cocoa can take several years to begin producing commercial quantities.
Illegal mining has emerged as another serious threat, particularly in Ghana. Mining activities have destroyed cocoa farms, polluted water sources and permanently removed productive agricultural land.
The loss of high-yield plantations adds to supply concerns at a time when global chocolate manufacturers are already dealing with volatility in cocoa production and prices.
Supporters of the EU regulation argue that stronger traceability is necessary to stop agricultural expansion from destroying forests. They maintain that companies profiting from cocoa and other commodities must take responsibility for ensuring their supply chains do not contribute to environmental damage.
However, farmers and exporters say the transition must be accompanied by financial and technical support.
Industry groups are calling for greater investment in national farm databases, satellite mapping, farmer identification systems and interoperable digital platforms.
They are also urging European buyers to enter long-term purchasing agreements and pay premiums that reflect the cost of producing fully traceable, deforestation-free cocoa.
Governments in producing countries will need to clarify land-use rules, strengthen forest monitoring and ensure that data collected by different institutions can be verified and shared securely.
Cooperatives could play a central role by registering members, mapping farms and maintaining records on production and sales. However, many farmer organizations will require training and funding to perform these tasks effectively.
Without adequate preparation, the EUDR could produce unintended consequences. Cocoa rejected by Europe may simply be redirected to less regulated markets rather than eliminating deforestation.
There is also a risk that buyers will concentrate purchases among a smaller group of large, easily traceable suppliers, leaving vulnerable farmers without dependable markets.
For global chocolate manufacturers, disruption in West African supply could increase sourcing and production costs. Those expenses may eventually be passed on to consumers through higher chocolate prices or smaller product sizes.
The EUDR therefore represents both an environmental reform and a major restructuring of the cocoa supply chain.
Its success will depend on whether European companies, producing-country governments and international development partners share the cost of compliance instead of leaving smallholders to carry the burden alone.
With the December 30 deadline approaching, West Africa’s cocoa sector faces an urgent race to map farms, strengthen traceability and protect access to its largest export market.
Source: Omanghana
