Cocoa, the main ingredient for chocolate, is seeing a surge in production outside its traditional growing area in West Africa. Farmers in Brazil, Ecuador, and Colombia are planting more cocoa trees as they see potential profit in the crop.
The rally in prices to the highest level in nearly 50 years is boosting this trend, which could ease the current supply tightness in the global cocoa market. It also challenges the livelihood of small African farmers, who face competition from more productive and sustainable orchards in South America.
Cocoa is a native species from the Amazon region, where it can be grown as a type of reforestation. In contrast, cocoa cultivation in Africa often involves deforestation and child labor, raising environmental and social concerns.
Brazil, an agricultural powerhouse and the top global exporter of soy, corn, coffee, and sugar, has seen cocoa plantations expanding over degraded pastureland in the Amazon region and in large farms in the highly developed grain belt.
The country was once the second-largest cocoa producer, but a devastating fungus in the 1980s sharply reduced output. Nearly four decades later, crops are recovering.
Brazil’s government projects output could grow to 300,000 metric tons by 2025 and 400,000 tons by 2030 from around 200,000 tons, turning the country from a net importer to a regular commodity exporter.
Ecuador has become the third largest global grower, behind Ghana, which produces around 750,000 tons. The top grower is Ivory Coast, with 2.2 million tons.
Ecuador’s annual production has risen to between 400,000 and 430,000 tons in 2022-2023 from 287,000 tons five years ago. The country expects production to continue to grow to as much as 800,000 tons by 2030.
Some of the new plantings in South America are huge compared to the small holdings in Africa. Most producers in Ivory Coast and Ghana have around five hectares.
Schmidt Agricola, a large agricultural company producing soybeans, corn, and cotton in Bahia, Brazil, has planted 429 hectares with cocoa, fully irrigated.
“I believe that the new profile of cocoa production will be large-scale,” said Moises Schmidt, one of the owners.
“You will need technology, and you need to seek higher yields to be more profitable. Grains and fiber (cotton) will continue to be our main crops, but we see cocoa gaining more area in the next five years.”
High-tech, irrigated areas such as Schmidt’s have produced as much as 3,000 kg of dry cocoa beans per hectare (ha), while the new areas in Brazil’s Amazonian state of Para produce around 2,000 kg/ha.
That is much higher than the Ivory Coast’s average yield of 500 to 600 kg/ha, which is similar to Ecuador. Ghana’s is smaller at around 400 kg/ha.
Jeroen Douglas, director of the Netherlands-based non-profit Solidaridad, which targets more sustainable supply chains, sees Brazil’s role in the market growing.
“On Brazil, once the mindset is: ‘yes, we want to get into this commodity’, there’s no way of stopping them. That mindset is not there yet, but I think we are getting to a tipping point,” Douglas said.
Brazil’s Amazonian state of Para is undergoing a revival in cocoa growing.
“People are coming back to the farms, people that left in the past to try jobs in towns,” said producer Jose Garcia, who farms cocoa on 70 hectares that used to be pasture in Medicilandia, Para state.
Those new orchards in the Amazon region would have an advantage in the European market since new EU legislation restricts commodity imports from areas that have been deforested for planting crops.
“If you plant cocoa trees there (Amazon region), it is considered reforestation,” said Douglas.
He said that a reforestation project with cocoa and other trees is part of strategies underway to strengthen the Amazon canopy.
Organizations such as the UN’s International Fund for Agricultural Development (IFAD) seek to preserve the market share of small farmers, including African cocoa producers.
IFAD’s head, Alvaro Lario, said it was important for smallholders to improve productivity, distribution, and marketing. The agency organizes training on agricultural techniques to increase production per hectare.
A broker at an international commodities trader said that chocolate companies are willing to source more cocoa away from Africa due to sustainability issues.
“They (companies) are tired of trying to defend their business there and certainly considering moving some of that business elsewhere,” the trader said.
The rise of cocoa production in South America could bring benefits not only for farmers and consumers but also for the environment and biodiversity. It could also inspire African producers to adopt more sustainable and profitable practices, creating a win-win situation for all.
Source: Reuters
