West African cocoa sector faces EU anti-deforestation compliance risks

West African cocoa producers are facing significant challenges in complying with upcoming European Union anti-deforestation regulations. The law, set to take effect at the end of December, bans commodity imports linked to deforestation. Because West Africa produces approximately 70% of the world’s cocoa and ships two-thirds of that to the EU, the new rules pose a major risk to regional exports.

In Nigeria, the world’s fourth-largest cocoa producer, there are roughly 300,000 mostly small-scale farmers. Experts warn that many may fail to meet the EU’s geolocation and mapping requirements. Similar compliance struggles are expected in Ivory Coast.

Industry analysts suggest these difficulties could lead to a supply squeeze in the EU that may last up to two years. This shortage could result in higher costs for chocolate manufacturers, while exporters who successfully invest in compliance may command premium prices for their beans.