Fine cocoa, Latin America's jewel

Among the abundant natural resources that may be found in Latin America, fine flavor cocoa stands out for its rarity and originality. It is the most select cocoa offered by international markets, and one that the most discerning palates may savor. 

Currently, the region is responsible for 80 percent of the global production of this type of cocoa, and considering that nine out of ten cocoa businesses are held by small producers, we are looking at an opportunity to encourage sustainable development models that promote inclusive trade and best practices in agro-forestry, in addition to innovations to diversify the supply of cocoa in the food, cosmetic, and phyto-pharmaceutical industries.  

Guided by CAF, the Latin American Cocoa Initiative (ILAC, for its acronym in Spanish) was created within this scenario. It includes the main Latin American producers of fine flavour cocoa to encourage productivity, promote sustainable green businesses, and boost a regional development strategy for this emblematic product in national and international markets.  

The initiative, which in its first stage includes Mexico, Panama, Dominican Republic, Colombia, Ecuador, Peru, Brazil, Costa Rica, and Bolivia, also expects to improve the management, administration, and structures of the organizations of small producers. At the same time, these improvements must facilitate access to new lines of financing, identify products with value added that may be created in the industry, and promote environmental best practices in the cocoa sector.   

Ligia Castro, CAF's Director of Environment and Climate Change, stated that "the production of cocoa directly and indirectly promotes economic inclusion and improves the life conditions of more than three million people. With this initiative, we intend to turn cocoa into a catalyzing and integrating element of opportunities for the exchange of knowledge, traditions, cultures, identities, and experiences in the region of the producing populations".  

Castro adds that the project, which seeks to close the productive gaps of knowledge and technology, will favor the entry of Latin American cocoa to markets that prioritize biotrade and quality supply. In addition, it will offer an opportunity to support the countries of the region in the development of a prime cocoa market that, as a result of its unique characteristics in terms of flavor and aroma, may be marketed outside the raw materials market with higher values than bulk cocoa. 

In any case, the region faces a series of challenges so that these projections may become a reality. Among the most important are the following: 

• Improve the income of small producers through agricultural and environmental best practices so that comprehensive opportunities may materialize in the development of the agroforestry system. 
• Develop national markets and improve access conditions to international markets.  
• Scientific research applied to diversification and value added of the supply, promoting new applications of cocoa for the cosmetic, pharmaceutical, industrial, and food industries. 
• Application of biotrade ethical practices , adding value to the reputation and quality of the regional supply. 
• Access to timely and adequate financing. 
• Modern norms to facilitate compliance with international regulations, applied scientific research, and competitiveness.  

The promising market of fine cocoa 

Currently, a ton of bulk cocoa has an average value that ranges between USD 3,100 and 3,500 per ton. The price of Latin American fine flavour cocoa ranges between USD 3,500 and 10,000 per ton. These values show the potential of sustainable businesses framed within this denomination of cocoa. 

In addition, the conventional cocoa market has also experienced great dynamism in past years. Between 2014 and 2015, world cocoa production reached 4,192 million tons: Africa produced 72 percent, Latin America 18 percent, and Asia  and Oceania 10 percent. 

Considering that between 80 and 90 percent of the world cocoa production is based on low scale family activities, the region faces the opportunity to address a double crossroad: stimulate the economy, while at the same time promoting entrepreneurial activities that generate a product through the sustainable use of the native biodiversity of the countries. 

In this respect, ILAC is also called to stimulate a new generation of green businesses that contribute with the region's sustainable development agenda with best environmental, social, and economic practices.