He cocoa has gone through a historic escalation of prices during 2024, encouraged by a decrease in the production global as a consequence of climate change that has generated a strong demand of the companies that process the main raw material of chocolate.
In the first 10 months of this year, the prices of the ton cocoa They have averaged 7,652.6 dollars, according to data from the financial portal Investing, which records maximums of up to 10,080 dollars only on March 25. Although the price of the cocoa future contracts They have been slowing down until reaching $6,848 this October 27, the figure is still double what it was a year ago.
This scenario has benefited the main actors in the value chain of cocoa in the Dominican Republic, who could be motivated to invest more in cultivation after having achieved revenues that, in many cases, doubled, executives specialized in the sector pointed out Free Diary.
The country has 48 companies who are dedicated to export of the cocoawhich sold 61,880 tons abroad as a result of the harvest 2023-2024 –which began on October 1 of last year and ended on September 30–.
The exports of this cocoa generated foreign exchange for 421.4 million dollars, 84.9% more than in the harvest 2022-2023, which had exported an additional 17,430 tons – with 79,311 tons – and had only generated sales of 227.9 million dollars.
“It is almost double what was exported in the aforementioned period, despite the fact that the year 2023-2024 registered low volumes of productionof 61,881 tons, less than the average of the last three years (69,405 tons)”, observed Víctor Hidalgo, executive director of the National Commission of Cocoaan autonomous entity charged with formulating policies to stimulate production of this crop, and which keeps track of these statistics.
He indicated that in the producers “There is an interest” in making improvements in their plantations after these results, which includes crop management, pest control and greater fertilization, which would have positive impacts for the next harvestprovided that the weather conditions are as favorable as those that have occurred in 2024.
The prices: a double edged sword
The commercial manager of the National Confederation of Dominican Cocoa Growers (Conacado), Abel Fernández, pointed out that, for a long time, the cocoa kept prices international prices below the costs of production and the sustainability levels of the crop.
“It is assumed that, with the increase of pricesthe producers are encouraged to do the investments that they could never do on their farms to improve them and increase their productivity and, consequently, generate a greater volume of production local and export“he stressed.
The vice president of sustainability of the company Roig Agro agrees with this CocoaFrancisco López, who understands that the investment It is one of the positive aspects of increase of pricesadded to a greater profitabilitythe possibility of reinvesting in the farm and a better positioning of the cocoa Dominican in premium markets.
Of the 421,464,995 dollars generated in this harvest90.15% ($379,955,881) depended on 10 large companies exporters. Both Roig Cocoa and Conacado remain – along with Rizek Cocoa– among the first three places, with some exports which grew 123.2% and 52.24%, respectively.
Even so, López emphasizes that, just as there are advantages to the high contributions of the cocoa in it international marketthere are also negative aspects.
“The increase in the price of cocoa is a double-edged sword for producers; it represents greater income for producers, but it also implies an increase in production costs”Vice President of Sustainability at Roig Agro Cacao.
Both the inputs for your production like the labour have doubled their price, which poses a challenge to maintain competitiveness, in a scenario in which prices of this raw material are still very volatile, and in which the large companies chocolate companies are already analyzing how to replace the use of derivatives cocoa for your products and reduce costs.
This substitution risk suggests that, at some point, current levels of demand They will descend.
Although the cocoa sector requires investmenta permanent increase in productivity In this crop – a long cycle – it would have an impact starting in the next seven or ten years, and even more so taking into account that 80% of the plantations are aged, specifies the National Commission of the Cocoa.
Hidalgo reported that, in the short term, the institution is providing teams and tools to facilitate the work of cocoa farmers, and working together with the Ministry of Agriculture in the delivery of fertilizersin the mechanization of the crop and in the control of some pests and diseases, actions that would affect the harvest 2024-2025.
The European Union and the cocoa organic
The European Union has remained the main buyer of the cocoa fine and aromatic that is produced in the country.
Only in the tariff item that includes the cocoa in grainthe Dominican Republic had exported 93,577,243 dollars to this conglomerate, according to the Ministry of Industry, Commerce and MSMEs (MICM), which records the data until July of this year.
This represents a increase of 50.11% compared to January-July 2023, when the exports were only 62,337,597 dollars.
He cocoa organic Dominican has remained the most distinctive offer towards this market, but this reality could change with the adoption of the regulation EU 2018/848, on production ecological and its labeling.
This regulation It mandates that operators have a maximum of 2,000 members, with none of them exceeding five hectares of exploited land – 25 tasks – nor having a sales turnover exceeding $25,000. The regulations grant a transition period between January 1, 2022 until December 31, 2024 for operators to catch up.
Although these requirements will help the producers interested parties in these markets are increasingly formalized, the high costs of certification could reduce the production organic for the future: what was previously a value-added product has become a “simple market requirement,” said Fernández.
- Added to this is compliance with the regulation EU 2023/1115 free envelope deforestation and forest degradation, which requires that farms like those of the cocoa are duly georeferenced and have traceability mechanisms.
The level of preparation needed by countries selling cocoa to comply with these requirements led the European Commission to postpone the entry into force of this law for another 12 months, granting up to December 31, 2025 to fulfill it.
“What we see with the new regulations and with this whole situation of prices high, it is that if there are high prices with the products (of cocoa) conventional, and the producers they do not receive a real or significant benefit to produce organicit is likely that many will be discouraged,” he added.
In the case of Roig Agro Cacao, The company foresees a drop of up to 60% in the number of tons certified as organic, due to the fact that producers that supply them do not meet the new standards. “We have between 500 and 800 producers. Of those, only 100 are going to meet expectations, in terms of cost-effectiveness.production that is profitable for them as producers certified individuals,” López observed.
During a visit to the Dominican Republic, Gloria Abraham, international trade consultant for the Inter-American Institute for Cooperation on Agriculture (IICA), recalled that the cocoa Dominican is one of the most outstanding products of the exports Dominican farmers.
“I believe that they have enormous growth potential with the cocoa they produce, and they have achieved it. I do not believe that they will, at this time, neglect any effort that is required to allow cocoa production to continue in a competitive position”IICA Consultant
He indicated that, although no one questions the purpose of the regulation of free deforestationthe truth is that the European authorities “must be very attentive” to the problem posed by the increase of the costs of productionwhich is why they must keep the producers about how the application of this evolves regulation.
