Farmers plant more cocoa outside Africa as prices rise

by MMC
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NEW YORK, Oct 2 (Reuters) – Schmidt Agricola is a large agricultural company producing soybeans, corn and cotton in Bahia, Brazil, one of the country’s new frontier agricultural zones ripe for high-tech agriculture in large scale. She recently added a new crop to her fields: cocoa.

Production of this chocolate ingredient is expanding outside of the main growing area of ​​West Africa, as farmers in countries like Brazil, Ecuador and Colombia see potential profit in the crop.

Rising prices to their highest level in almost 50 years reinforces this trend, which could ease the current supply tension in the global cocoa market. This also poses a threat to the livelihoods of African smallholder farmers, as newly planted orchards like those in South America are more productive, thereby reducing the overall cost of production.

As environmental concerns rise globally, the fact that cocoa is an indigenous species to the Amazon region makes its planting in South America a kind of reforestation, while in Africa native forests are razed to open up spaces for cocoa orchards.

Brazil, an agricultural powerhouse and the world’s largest exporter of soy, corn, coffee and sugar, has seen its cocoa plantations expand into degraded pastures in the Amazon region, as well as large farms in the grain belt. highly developed.

The country was once the second largest producer of cocoa after Ivory Coast, but a devastating fungus in the 1980s known as witches’ broom sharply reduced production. Nearly four decades later, harvests are recovering.

The Brazilian government projects that production could reach 300,000 tonnes by 2025 and 400,000 tonnes by 2030, up from around 200,000 tonnes currently, which would make the country a net importer to a regular exporter of this product.

In Ecuador, annual production increased to between 400,000 and 430,000 tonnes in 2022-2023 (October-September), compared to 287,000 tonnes five years ago, according to estimates from the International Cocoa Organization (ICCO) and the Ecuadorian export group Anecacao.

Ecuador has become the third largest producer in the world, behind Ghana which produces around 750,000 tonnes. The leading producer is Ivory Coast with 2.2 million tonnes.

Anecacao, which last July received a record attendance of around 70 buyers from Asia, the United States and Europe for a trade conference and exhibition in Guayaquil, estimates that production could continue to grow until 800,000 tonnes by 2030.

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LARGE-SCALE AGRICULTURE

Some of the new plantations in South America seem immense when compared to small farms in Africa. Most producers in Ivory Coast and Ghana own around 5 hectares.

Schmidt Agricola has planted 429 hectares of cocoa, fully irrigated.

“I believe the new profile of cocoa production will be large-scale,” said Moises Schmidt, one of the owners.

“You will need technology, you will need to seek higher yields to be more profitable. Grains and fiber (cotton) will continue to be our main crops, but we expect cocoa to gain more acreage over the next five years.”

High-tech irrigated areas such as Schmidt’s have produced up to 3,000 kg of dry cocoa beans per hectare (ha), while new areas in the Brazilian Amazon state of Para produce around 2,000 kg/ha .

This is well above the average yield of Côte d’Ivoire, 500 to 600 kg/ha, which is similar to that of Ecuador. That of Ghana is smaller, at around 400 kg/ha.

Jeroen Douglas, director of Solidaridad, a Netherlands-based nonprofit that aims for more sustainable supply chains, sees Brazil’s role in the market growing, just as it has with other agricultural products such as soybeans and corn.

“In Brazil, once the mindset is, ‘yes, we want to get into this product,’ there’s no way to stop them. That mindset isn’t there yet, but I think we are reaching a tipping point,” Douglas said.

RETURN TO AGRICULTURE

The Brazilian Amazon state of Para is experiencing a resumption of cocoa cultivation.

“There are people coming back to the farms, people who left in the past to try work in the city,” said producer José Garcia, who grows cocoa on 70 hectares (172 acres) that were once farms. pastures in the municipality of Medicilandia, Para. State.

These new orchards in the Amazon region would have an advantage on the European market since new European legislation restricts imports of products from areas that have been deforested for planting crops.

“If you plant cocoa trees there (Amazon region), that’s considered reforestation,” Douglas said.

He said a reforestation project with cocoa, as well as other trees, is among ongoing strategies to strengthen the Amazon canopy.

On the other hand, organizations such as the United Nations International Fund for Agricultural Development (IFAD) seek to preserve the market share of small farmers, particularly African cocoa producers.

IFAD Director 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 for an international commodities trader, who asked to remain anonymous due to the sensitivity of the subject, believes chocolate companies are willing to source more cocoa from Africa due to cocoa concerns. sustainability linked not only to deforestation, but also to child labor. .

“They (the companies) are tired of trying to defend their business there and are certainly considering moving some of that business elsewhere,” the trader said.

Reporting by Marcelo Teixeira in New York; additional reporting by Maytaal Angel in London. Editing by Simon Webb and Anna Driver

Our standards: The Thomson Reuters Trust Principles.

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Covers agricultural products and biofuels, including production, trade and transportation, based in New York. Former correspondent in Brazil and climate/environment reporter. Brazilian, holds a bachelor’s degree in journalism and did graduate studies in environmental reporting at the German institute InWent and in foreign policy and international political economy at Harvard University. Passionate football and tennis player.

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