Cote d'Ivoire and Ghana's move to combat farmer poverty with a living income premium for their cocoa sales is being undermined by chocolate makers scaling down purchases and negotiating discounts on other parts of the price, sources said.

Confectioners publicly backed a move by the two countries, which together account for 60 percent of global cocoa supply, to introduce a $400 a metric ton living income differential (LID) or premium in July on cocoa sales for the 2020/21 season.

But trade sources said they have partially offset the new cost by negotiating down another charge paid for West African cocoa — the country premium, or "differential," which covers bean quality differences and is a key element in the cocoa price.