Ecuador Cocoa Group Sees Record Crop Extending Lead Over Brazil

Aug 27, 2014 8:59 am ET

Aug. 26 (Bloomberg) -- Ecuador, already the world’s biggest grower of flavored beans used in fine chocolate, is poised to extend its lead over Brazil as the top cocoa producer in the Americas as exporters forecast another record harvest.

Cocoa output probably will rise about 9 percent to 240,000 metric tons in 2014 on government assistance programs and new plantings and as concern subsides that the El Nino weather phenomenon would curb yields, according to Ivan Ontaneda, president of Ecuador’s National Cocoa Exporters Association, known as Anecacao. That’s 14 percent more than the International Cocoa Organization’s 210,000-ton forecast and 20 percent higher than its estimate for Brazil, according to data compiled by Bloomberg, based on information from the group.

The South American nation, where the fatty beans used to make chocolate have been grown since pre-Columbian times, is taking advantage of increased demand for fine chocolate in emerging markets as economic growth boosts salaries and makes luxury items more accessible, Ontaneda said. A new trade agreement reached last month with the European Union, the world’s biggest consumer of fine chocolate, will also help spur investment in and production of Ecuadorean cocoa, he said in an interview at his office in Guayaquil.

“Weather conditions in the fields have been good so far,” Ontaneda, who’s also chief executive officer of cocoa exporter Eco-Kakao SA, said yesterday. “There’s not a single cocoa bean that goes unsold.”

An outbreak of the witches’ broom fungal disease in Brazil reduced the nation’s crop last year. Repeated outbreaks of the disease since the 1980s displaced Brazil from the position of top producer and have since discouraged planting, while West African countries took the lead. The Ivory Coast is the world’s top producer, followed by Ghana.

While Ecuador’s Arriba varietal is used in fine chocolate, ordinary or bulk beans are used for mass production. Chocolate makers like Nestle SA, the world’s biggest food company, operate in the Andean nation.

“Risks from El Nino have decreased and if it’s going to occur, it will be light to moderate,” Ontaneda said. “If rains start in November or December, it’ll be considered a normal rainy season.”