For a moment, Julia Avellan thought about giving up her cocoa farm, then prices skyrocketed and the Ecuadorian producer saw her income increase. But now she must deal with threats from organized crime.
With a cap on her head and pruning shears in her hand, this 41-year-old woman walks through her farm in Buena Fe, in the province of Los Rios (west), where there are many cocoa trees.
In the middle of the fields, she cuts one of the pod-shaped fruits in two to remove the viscous and fragrant cocoa beans from the white pulp.
The price of these beans has been rising steadily since 2023, reaching $10,000 per tonne for the first time in New York in March due to strong global demand and a significant reduction in supply from West Africa.
– “The golden seed” –
In Ecuador, where the government does not regulate cocoa prices, profits are increasingly important for producers.
This year, Julia Avellan was able to sell her cocoa for $420 per 45 kg, compared to $50 or $60 previously, a price that “made her want to abandon cultivation.”
Today, “we can ensure the future of our families, we will live better, (…) and take care of our plantations, because now (cocoa) is the golden seed”, rejoices the producer, who inherited the profession from her grandparents.
“These prices are historic, we have never had them before,” says Ivan Ontaneda, president of the National Association of Cocoa Exporters and Industrialists (Anecacao).
In Ecuador, small producers grow 80% of the total beans produced in 22 of the 24 provinces. The rest is produced by medium and large plantations.
After Ivory Coast and Ghana, Ecuador is the third largest producer in the world with some 420,000 tonnes per year.
However, in recent months, extreme weather conditions and plant diseases have devastated crops in Africa, causing prices to rise significantly around the world.
In Ecuador, almost all production is exported: in 2023, cocoa will bring in $1.3 billion. Thanks to the surge in prices, between January and April 2024, the country has already sold $774 million worth of cocoa, according to the Central Bank.
The country’s main markets are Indonesia, Malaysia, the United States, the Netherlands and Belgium.
– Kidnappings and extortions –
But this boom is overshadowed by violence linked to drug trafficking and gangs, with which the government has been at “war” since January. Cocoa producers are now the target of extortion, theft or even attempts to appropriate their farms.
Los Rios is one of the most violent provinces in the country with a homicide rate of 111 per 100,000 inhabitants, much higher than that of the neighboring province of Guayas (86), whose capital Guayaquil is the main export port drugs to the United States and Europe.
“Several of my colleagues were kidnapped. Not long ago, not even eight days ago, they kidnapped a young man (…) they stole trucks loaded with cocoa from companies,” says Julia Avellan.
The threats from criminals result in an “increase in costs” in the cocoa production chain, Marco Landivar, director of a processing plant for the company Eco-Kakao, told AFP.
“Loads must be accompanied by private security, all movements towards the port are doubly monitored,” he notes.
According to the president of Anecacao, some $20 million was spent in 2023 for the security of the sector.
– “Blood on the noses of sharks” –
The price surge was further fueled by rampant speculation. “Hedge funds entered the market to buy cocoa on paper (…) and managed to skyrocket” prices, underlines Mr. Ontaneda. It was like “blood for the sharks,” he notes.
But production struggled to keep up with this artificially inflated demand and there were breaches of contracts as producers and middlemen were unable to supply the market.
“The quadrupling of cocoa prices has had an impact on the global industry, on grinding, on demand and ultimately on the consumption of chocolate”, the main derivative of cocoa, whose prices could also skyrocket, notes by elsewhere Mr. Ontaneda.
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