① Due to bad weather, tree aging, and crop diseases, production in West Africa, where cocoa is mainly produced, has dropped sharply. Cocoa prices have more than doubled this year. New York cocoa futures hit a record high of $11,722 per ton last month; ② Brazil, Colombia, and Ecuador all plan to drastically increase the area under cocoa cultivation.
Finance Association, May 13 (Editor Xia Junxiong) After cocoa prices continued to soar, South American countries such as Brazil saw business opportunities and wanted to share a share of the pie.
Due to bad weather, aging trees, and crop diseases, production in West Africa, where cocoa is mainly produced, has dropped sharply. Cocoa prices have more than doubled this year. New York cocoa futures hit a record high of 11,722 US dollars per ton last month. Although cocoa prices have declined markedly recently, they are still far above the historical average.
More importantly, the current Cocoa pullback is mainly due to lack of liquidity. Market fundamentals have not changed. Cocoa is expected to be in short supply for the third year in a row this year.
About two-thirds of the world's cocoa comes from West Africa, mainly Côte d'Ivoire and Ghana. Brazil was also once one of the world's major cocoa producers. Serious plant diseases broke out in the country at the end of the 80s of the last century, causing a large number of cocoa trees to wither. Brazil's status as a major producer of cocoa also plummeted.
As cocoa prices skyrocketed, farmers in the Brazilian state of Bahia have begun planting cocoa trees. These trees are at least a year away from fruiting, but the potential benefits are huge.
Agricultural giant Cargill is teaming up with Schmidt Agriculture, a major agricultural group, to grow 400 hectares of cocoa near Barreiras. Swiss chocolate manufacturer Bellagio and its partners have jointly developed around 5,000 hectares of cocoa plantations in Bahia.
According to estimates by the Brazilian Cocoa Commission, as more farmers start growing cocoa, Brazil's cocoa production is expected to double to around 400,000 tons by 2030. And this will bring Brazil's cocoa production close to the third highest in the world.
However, some people think this forecast is too conservative. Moisés Schmidt of Schmidt Agriculture believes that if growers grow more cocoa outside of traditional cocoa production areas, annual production will reach 1.8 million tons over the next 10 years.
Meanwhile, other countries in South America are also increasing the cultivation of cocoa.
In Colombia, the country's largest food processor, Grupo Nutresa, is investing in a new nursery with the goal of growing 10 million cocoa trees over the next five years.
Meanwhile, in Ecuador, which is already a major cocoa producer, local farmers are expanding the planting area and improving technology. The goal is to increase production by more than 50% to 700,000 tons within four years, according to the head of the country's Cocoa Exporters Association.