Balancing the Cocoa and Chocolate Chain

Talking about balance in the cacao and chocolate chain with fair trade in 2024 is extremely important, as we are going through a challenging time for the chocolate industry.

If before the chocolate industry was considered the “villain” that did not adequately remunerate the cocoa producer, it now finds itself pinned down by the surprising increase in the market.

The price of cocoa on the stock exchange from December 2023 to April 2024 increased by two and a half times, surprising even the most experienced in this industry. With the price of cacao on the rise, several issues that previously raised concerns in cocoa production, such as a low resource to invest in plantations with good management practices in the field aimed at increasing productivity and sustainable land use practices and the low payment for cocoa (which affects the producer's enthusiasm to continue growing) now cease to be a problem.

Cacao producers are excited and investing in their properties.

However, since everything has two sides, while cocoa producers are happy, the chocolate industry is frightened by this sudden increase. The budgets for the purchase of raw materials are all over, the strategies for predicting buying and selling are uncertain and although The increase in the price of chocolate for the consumer is inevitable, the question is how it will be accepted.

In addition, another point brought about by the rise in cacao are uncertainties for the specialty market such as fine cacao, organic cacao or fair trade. Historically, these products were marketed with added value, which, until then, provided more motivation to producers to obtain better income with cacao. However, consequently, it also increases the cost of production, since they are items that require longer working hours, more investment in infrastructure, more risks involved with the sale, which is not justified to sell for the same price as commoditie cacao. With the increase in cacao, the percentage of premiums previously charged at this time is not feasible for buyers, as the values increase along with the increase in the stock market. An impasse, because businesses in which the brand that was structured with fine or organic cacao, such as bean to bar manufacturers, cannot simply migrate to a lower quality product such as the commoditie.

The moment is challenging for the chocolate manufacturing industry, and when these dough products or specialties are products, the fact is: We are faced with a new market reality.

If the chocolate business doesn't live without cacao, there's also no need to produce cacao if it's not to make chocolate. With this topic on the rise, several chocolate factories are visiting cocoa production sites to understand the relationships involved. Urgent issues need to be addressed in the field with the production of cacao and now is the time, however chocolate factories will be seriously hit if that bill is paid by them alone. At this time, these and other stakeholders, such as retail, need to be called up for discussion.

The market is prosperous and consumers want to continue to consume good quality chocolate. We are at a moment of opportunity for partnerships and collaborations to be formed, and a balanced trade to be applied, so that we can have sustainability in the business.

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