Introduction: A New Player in Cocoa Production
For decades, West Africa has dominated the global cocoa market, with countries like Côte d’Ivoire and Ghana leading the charge. However, Latin America has emerged as an increasingly important cocoa producer in recent years. Countries like Ecuador, Peru, and Colombia are making significant strides in expanding their cocoa production, carving out a niche in premium and sustainable cocoa sectors.
Latin America: A Cocoa Powerhouse on the Rise
The share of global cocoa produced in Latin America has been steadily increasing, thanks in part to structural challenges in West Africa. Côte d’Ivoire and Ghana, the world’s two largest cocoa producers, face numerous long-term issues such as aging trees, plant diseases, low productivity, and a lack of investment. These problems, exacerbated by unfavorable weather, have resulted in supply shortfalls that led to soaring prices. In contrast, Latin American countries are benefiting from younger trees, better investment, and favorable weather conditions, positioning them for long-term growth.
Between 2014 and 2024, Ecuador saw an impressive 83.8% increase in cocoa production, while Côte d’Ivoire managed only 3.1% growth. Brazil and Peru are also making significant strides. Ecuador, in particular, has become a focal point, with government and private sector investments boosting both production and domestic processing capacity. Large cocoa processors like Barry Callebaut have recently expanded operations in the country, and the forecast for 2024 shows continued growth.
Global Players Recognizing Latin America’s Importance
Latin America’s growing role in the cocoa supply chain is being recognized globally. For the first time, the World Cocoa Foundation (WCF) will hold its annual Partnership Meeting in São Paulo, Brazil, in March 2025. This significant move underlines the increasing importance of the region, with all major industry players expected to attend. Naturally, Farmforce will be there to support its customers and showcase its traceability solutions.
A Growing Production Hub
Latin America’s entry into the global cocoa supply chain brings both opportunities and challenges. As demand for sustainably sourced and traceable cocoa continues to rise, Latin American producers are uniquely positioned to meet these demands:
- Premium Cocoa and Sustainability: Latin America is recognized for its high-quality cocoa beans, particularly the fine flavor and aroma varieties sought after by premium chocolate brands. Countries like Ecuador are leaders in this segment, offering a competitive edge.
- Diversification of the Supply Chain: Latin America’s rise as a cocoa producer provides much-needed diversification to the global supply chain, reducing reliance on West Africa. This is crucial in an era where sustainability, traceability, and resilience are essential due to climate change and other socio-political challenges.
- Sustainability Practices: Latin America’s focus on organic, fair-trade, and deforestation-free cocoa has attracted global buyers looking for sustainable sources. This aligns perfectly with regulations like the EU Deforestation-Free Products Regulation (EUDR), which emphasizes responsible sourcing practices.
Challenges in Scaling Cocoa Production
Despite the opportunities, Latin America’s growing cocoa industry also faces several challenges:
- Climate Change Impact: Like West Africa, Latin America’s cocoa production is vulnerable to extreme weather conditions, which can significantly affect yields and quality. Climate change adaptation strategies are critical to sustaining this growth.
- Traceability and Compliance: As new markets emerge, the need for transparency and traceability increases. With regulations such as the EU Corporate Sustainability Due Diligence Directive (CSDDD), Latin American cocoa producers will need to ensure they meet the required social and environmental standards, especially regarding child labor and deforestation.
- Supply Chain Fragmentation: Many Latin American cocoa farms are smallholder-based, making it difficult to consolidate and organize production at scale. Ensuring traceability and sustainability across multiple farms is a complex task, particularly with varying regulations across countries.
Farmforce’s Footprint in Latin America
Farmforce has already established a strong presence in Latin America, working with producers and cooperatives across Colombia, Peru, and Ecuador to trace cocoa production. Our platform helps ensure full transparency and traceability from farm to market, making it easier for companies to meet international regulations like the EUDR and CSDDD.
- Traceability and Compliance: Farmforce enables cocoa producers in Latin America to comply with stringent regulations by tracking their supply chains, ensuring sustainable farming practices, and certifying social and environmental compliance.
- Supporting Sustainability: We support companies in demonstrating their commitment to sustainable cocoa production, providing insights into certification, mapping, and surveys to meet fair-trade and organic farming standards.
- Empowering Smallholder Farmers: Farmforce’s technology helps smallholder farmers improve their practices, track production, and access global markets, increasing productivity and sustainability.
In addition to our existing footprint, exciting announcements of new partnerships with major players in Latin America are on the horizon. Stay tuned for more updates!
The Future of Latin American Cocoa
Latin America’s prominence in the global cocoa market will continue to grow as the region strengthens its focus on premium cocoa production and sustainability. However, navigating the challenges of climate change, traceability, and compliance requires innovative solutions. Farmforce is proud to be at the forefront of this transformation, supporting cocoa stakeholders across the continent.
