Farmers are planting more cocoa outside of Africa as prices rise.

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Schmidt Agricola, a large agricultural company in Bahia, Brazil, has recently added cocoa to its fields, expanding production beyond the main growing area in West Africa. The rally in prices to the highest level in nearly 50 years is boosting this trend, which could alleviate supply tightness in the global cocoa market. However, it also poses a threat to the livelihood of small farmers in Africa since recently planted orchards in South America are more productive, reducing the overall cost of production.

As environmental concerns rise globally, planting cocoa in South America is considered reforestation, while native forests are being razed to open space for cocoa orchards. Brazil, an agricultural powerhouse and the top global exporter of soy, corn, coffee, and sugar, has seen cocoa plantations spreading over degraded pastureland in the Amazon region and on large farms in the highly developed grain belt.

Brazil’s government projects that output could grow to 300,000 metric tons by 2025 and to 400,000 tons by 2030, turning the country from a net importer to a regular exporter of the commodity. In Ecuador, annual production has risen to between 400,000 and 430,000 tons in 2022–2023 (Oct–Sept) from 287,000 tons five years ago. 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.

Schmidt Agricola has planted 429 hectares of cocoa, fully irrigated. “The new profile of cocoa production will be large-scale,” said Moises Schmidt, one of the owners. 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. This is much higher than the Ivory Coast’s average yield of 500 to 600 kg/ha, which is similar to Ecuador.

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.

SOURCE: REUTERS (Marcelo Teixeira)