Commodities
An estimated two billion of the world's poorest people live in households in developing countries, and depend on agriculture in some form for their livelihoods. Access to finance remains a significant challenge for businesses within these countries, but we know with our support, these enterprises can generate sustainable economic growth.
Our key focus is to provide finance directly to smaller, vulnerable organisations, who often have no other affordable source of funds. We do this by offering finance in two ways: directly to producer groups that follow Fair Trade Principles and to fair trade retail businesses, wholesalers and FLO Traders.
The value chains we support
The types of products our lending activities support has continued to diversify in alignment with the objectives set in our strategic review, and this has helped us to reach more producers who require finance. You can read a copy of our strategic review and find out more about our efforts to diversify our commodity portfolio here.
The commodities our producers work with include: coffee, cocoa, handcrafts, fruit, nuts, tea, quinoa, grains, honey, chocolate, garments, herbs, spices, vegetables, processed foods, sugar and more.
Image below: A breakdown of the products we have supported in 2024.
Coffee
Coffee remains the largest sector in our value chain, and in our Latin American portfolio. This highlights the robust demand for Fairtrade and organic coffee, which requires trade finance.
Many factors are affecting the livelihoods of the world's coffee farmers, from an increase in coffee prices, driven by climate change impacts, to emerging European legislation, requiring further expenses to facilitate traceability systems.
Today, the coffee industry supports over 120 million people across the globe, and 80% of the world's coffee supply is produced by 25 million smallholder farmers: the very people we support with our members' investments.
The World Bank estimates nearly half of those smallholders are living in poverty, with nearly a quarter living in extreme poverty.
You can learn more about the coffee producers we support here.
Cocoa
The majority of our cocoa customers are based in West Africa. Climate change is exerting a significant impact on agricultural production across the region.
Cocoa farmers are grappling with increasingly unpredictable rainfall patterns, which have contributed to lower yields. Moreover, pest and disease outbreaks, such as the spread of the swollen shoot virus, are becoming more prevalent.
Current analysis shows that cocoa farmers in West Africa typically receive between 4-6% of the retail price of a chocolate bar. Under Fairtrade terms, farmers are guaranteed a minimum price plus a premium, which as of 2024 stands at a minimum price of $2.40 plus a premium of $0.24 per kg of cocoa beans.
However, the challenge persists that even within the Fairtrade system, African cocoa farmers struggle to achieve a living income, typically selling only about half their production under Fairtrade terms due to limited market demand for Fairtrade certified cocoa.
The co-operative structure continues to provide significant advantages for Fairtrade certified farmers, including the provision of essential training which enables farmers to offer buyers more reliable quantity and quality guarantees, leading to more favourable contracts. Collective benefits of co-operatives for farmers also include:
- Shared costs for transportation
- Equipment
- Storage facilities
- Enhanced negotiating power
Learn more about the cocoa producers we support here.
Handcrafts
The handcraft and textile sectors continues to play a significant role in our portfolio. The global recession has reduced demand for handcrafts, including textiles, impacting lending in this segment.
Nevertheless, we remain committed to supporting small and disadvantaged producer groups, maintaining our position as the only social lender active in the handcraft sector. The majority of disbursements for handcrafts continue to be made through buyer lending, enabling us to reach more producers from across the globe.
Nuts
Small but mighty, nuts are considered the hidden heroes of a healthy diet, as they are full of nutritious fibre, fats, protein, vitamins and minerals. Coinciding with a trend which is driving healthier snacking options and plant-based sources of protein, it is unsurprising, then, that the subsequent demand for edible nuts is estimated to grow, with the value of the global market projected to rise to $101.5bn by 2026.
Despite the lucrative value of their crops, nut farmers often struggle to make a decent living. Many face difficult working conditions and low pay, with the average cashew farmer, for example, earning just a little over £2 a day. However, supporting Fairtrade nut producers offers an opportunity to change this.
Fairtrade nuts such as almonds, brazils, cashews, peanuts, macademia nuts, walnuts and shea nuts are grown in countries such as Vietnam, Chile, Brazil, India, Tanzania and Sri Lanka, and they’re the ideal solution for people and planet.
Honey
In 2021, the annual average production of honey across the globe was 1.77 million metric tons. In the UK, consumers accounted for 43,000 tons of honey, and 95% of this honey is imported from outside the country. The global honey market size was valued at 8.68 billion dollars in 2021 and is expected to grow to 12.9 billion by 2030.
The honey produced in the regions we operate are typically harvested using traditional methods, in areas with abundant flowering plants so that the bees may forage and produce honey at their own pace. Once the honey is ready it is extracted using simple tools and techniques with minimal disruption to the bees and their habitat.
Meanwhile, organic certifications protect bees and pollinators from harmful beekeeping practices, and fair trade standards means that beekeepers get fair prices for their honey.
Our honey producing customers have unique, sustainable relationships with bees and their environment. For example, members of Educe, a honey co-operative in Mexico, perform sacred rituals passed down through generations of Mayan beekeepers, to thank the bees for their generosity.
It is essential that we continue to support honey producers to improve their livelihoods whilst conserving a balance in the delicate natural environment.
Other Products
Shared Interest also supports producers in other commodity markets such as fruit, seeds, sugar, herbs and moss production. We are committed to diversifying our portfolio of products so that we can continue to reach and support the most vulnerable communities, in all corners of the world.