Hundreds of thousands of tons of coffee and cocoa stored in the European Union’s warehouses are at risk of destruction due to the unintended consequences of the new deforestation law that came into force in June this year, the Financial Times reports.
According to this law, which aims to ban the sale within the EU of products, including coffee, cocoa, palm oil and rubber, that were grown in areas where deforestation occurs. The Intercontinental Exchange (ICE), which is an important center for trading coffee and cocoa futures, as well as the International Trade Center, a joint agency of the UN and the World Trade Organization, expressed outrage, noting that coffee and cocoa stored in the EU during the transition period until December 2024 may not comply with the new rules and must be sold outside the bloc or destroyed.
About 70% of the world’s cocoa comes from Côte d’Ivoire and Ghana, where deforestation and child labor are widespread. The largest coffee producers are Brazil, Vietnam, Colombia, and Indonesia.
Trade experts have expressed concern, pointing to the possibility that products may not be able to comply with the new rules, which could lead to their removal from the market or destruction. This could lead to disruptions in the supply chain from farmers to consumers, which in turn would affect the industry and create significant difficulties.
Discussions with EU member states are currently underway to find a solution to store the imported crop during the transition period.