Global demand for cacao to swell by 2020

CEBU, Philippines – The Philippines has to increase its production of cacao to be able to take advantage of the projected rise in cacao global demand by 2020.

Experts predict a 1 million metric ton (MT) shortage of cacao globally by 2020. Global demand is expected to reach between 4.7 million to 5 million MT by 2020.

That, according to Department of Trade and Industry-Central Visayas Regional Director Asteria Caberte, is a good news and a challenge for farmers and businesses in the Philippines.

"Our country is well placed to supply the world with the chocolate it needs. The Philippines in general is a good place to grow cacao because it is on the Equator, the only part of the world where cacao can grow," Caberte said during the Cacao Industry Investment Forum in Cebu City yesterday.

The DTI official said the country's potential stands to benefit many growers, retailers and chocolate makers, citing its perfect climate and soil conditions conducive for cacao cultivation and the ready global market.

Citing data from the Department of Agriculture (DA), Caberte noted the Philippines currently produces 10,000 to 12,000 MT of dried cacao beans, not even enough to meet the local demand of 30,000 MT.

"According to DA data, cacao is also grown in Luzon and Visayas. Cebu specifically wants to be a significant participant in the industry," she added.

Currently Mindanao accounts for around 90% of the country's cacao output, with Davao Region producing the 78% from 2008 to 2012, according to the statistics agency.

Edwin O. Banquerigo, DTI National Cacao Industry Cluster coordinator, said the country has set a target to produce 100,000 MT of fermented cacao beans by 2020 for export and domestic markets through a 40% annual increase in production, a goal set in the industry's road map.

According to DA, the average annual cacao consumption in the Philippines is 50,000 MT. While Euromonitor International expects the country's chocolate market to grow 13% by 2017.

Caberte also said Asia is one of the fastest growing cacao consumers in recent years, adding that Europe and the US, two of the largest markets, have had an average of 3% annual cacao consumption growth over the years.

The DA said that some factors have contributed to the increasing global cacao demand such as: the rising public awareness on its health benefits as well as preference for chocolate; expanding range of applications in food, beverage, cosmetics and pharmaceuticals; and increasing disposable income of middle class.

Banquerigo said cacao production in West Africa and Indonesia is declining, giving opportunity for the Philippines to feed the global demand.

In the local market, he said that among the prospects include: the growing number of restaurants and coffee shops serving cacao-based drinks and food items; rise in consumption of cacao in the pastry industry; shift to dark and pure chocolate; and growing number of medium and small-scale chocolatiers needing high quality beans.

While demand is on an uptrend, Banquerigo pointed out supply gap continues to exist due to pressure brought about by weather conditions, pest and diseases, low productivity, aging trees, competing crops and unsustainable cacao farms.

"While the sector has so much to offer, development remains low," he said.

He added the 2013-2020 Philippine Cacao Industry Cluster Plan was already created to serve as blueprint for the implementation of various interventions to revive the country's cacao industry. (FREEMAN)