Friday, February 10, 2012

Phase 1: Introduction to Cacao Farming - Part 2

Here are my notes on some of the things I have learned so far about cacao farming and the cocoa industry based on my time with the CocoaPhil team, farmers, and agriculturalists (part 2):

The Cocoa Industry

  • Since 2007, global production of cocoa beans has averaged 3,656,660 metric tons:
    • Africa 69.9%
    • Asia 16.6%
    • Americas 13.5%
  • Cacao bean prices by December 2010 was at $3,470 US per metric ton
  • Global cocoa consumption is about 3.5 million metric tons and has grown 2.5% annually over the past 10 years
  • Chocolate product consumption has been growing at about 3% annually (except in 2009 due to recession)
  • Consumption has been growing fastest in Brazil
  • Per capita consumption of cocoa is highest in Western Europe and North America where incomes are higher and is lowest in Latin America and Asia where incomes are lower
  • Major manufacturers want to do more to meet rising demand:
    • Kraft Foods in 2009 was 22,000 metric tons; target in 2012 is 50,000 metric tons
    • Nestle in 2009 was 4,000 metric tons; target in 2012 is 30,000 metric tons
    • Mars in 2009 was 5,000 metric tons; target in 2012 is 100,000 metric tons
    • Hersheys in 2009 was 10,000 metric tons; target in 2012 is 855,000 metric tons
  • Domestic production in the Philippines in 2009 was only 6,263 metric tons
    • Domestic demand continues to outpace production
  • In Asia, there is increasing consumption but also a large grinding industry that continues to expand
  • The regional production of quality fermented beans is only 26% of the 680,000 metric tons of beans produced annually in the region. As a result, regional processors import almost 220,000 metric tons of fermented beans from West Africa and South America.
  • Because of higher shipping costs due to rising fuel prices, the Philippines has an increased competitive advantage in gaining access to the Asian market compared to West African and South American
  • Race to the Top of the Global Cocoa Market:
    • Indonesia in 2006 was 680,000 metric tons; target in 2020 is 900,000 metric tons
    • Papua New Guinea in 2006 was 55,000 metric tons; target in 2020 is 100,000 metric tons
    • Philippines in 2006 was 6,000 metric tons; target in 2020 is 100,000 metric tons
    • Malaysia in 2006 was 30,000 metric tons; target in 2020 is 50,000 metric tons
    • Vietnam in 2006 was 3,000 metric tons; target in 2020 is 30,000 metric tons

Philippines Goal by 2020

  • produce 100,000 metric tons of cocoa country-wide
  • Philippines can intercrop with 10% of existing coconut areas – that gives approximately 107,874 hectares for planting cacao trees.
  • will need to plant 10 million seedlings per year over the next 5 years – 50 million cacao trees will result in approximately 105,000 metric tons in anticipated cocoa bean production by 2020

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