Bloomberg News

Kraft South Africa to Buy Cocoa Direct From West African Farmers

June 07, 2011

June 7 (Bloomberg) -- Kraft Foods Inc.’s South African unit will pay extra for cocoa beans sourced directly from West African farmers to make its Cadbury Dairy Milk chocolate bar, securing it Fairtrade certification, the company said.

Thousands of farmers in the world’s top producing region for the chocolate ingredient will receive internationally agreed Fairtrade prices and a further $200 per metric ton to invest in local business and community development, the world’s second- biggest food company said in an e-mailed statement today.

Fairtrade certification requires a company to pay cocoa and sugar producers an additional amount, which is used for programs from building wells to hiring local teachers for the community.

Fairtrade Label South Africa, which confirmed that it issued the certification for Kraft, is part of a network it says represents 500,000 African small-scale producers and farm workers. The group of 24 organizations worldwide seeks to secure better deals for farmers around the world.

Cocoa for July delivery dropped 0.4 percent to 1,772 pounds ($2,907) a metric ton on NYSE Liffe in London yesterday, having earlier fallen to 1,765 pounds, the lowest price since August 2009.

--Editors: Gordon Bell, Alastair Reed

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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