The global cacao shortage and its impact on the Philippines

We checked up on a local cacao farmer and our leading artisanal chocolatiers to ask what exactly is happening, how they are coping, and what should be done to avoid this in the future

Chocolate is one of the most popular food types and flavours in the world. Cocoa, its main ingredient, comes from the cacao fruit whose seeds are fermented, dried, roasted, and ground to make cocoa, which is then made into different forms of chocolate. In Latin America (or what was known as ancient Mesoamerica) where the cacao tree was first domesticated five thousand years ago, chocolate is not only consumed as food but also drank in rituals and for medical purposes. They also use it to flavour savoury sauces, such as the Mexican molé which is thick and complex. Still, in most parts of the world, chocolate is best known as a sweet, after-meal treat, a decadent dessert to perk one up with its natural mood enhancers. It is famous not only because it tastes divine, but is proven to make us feel good too.

However, its very existence seems to be threatened by the current global cacao shortage, causing panic within the chocolate industry. Bacolod-based farmer Chris Fadriga is best known for his dedication to the propagation of what is known to be the best cacao plant variety in the world, the criollo cacao. What is causing this shortage, we ask. “Most of the world’s cacao supply comes from African countries where they have been planting them for centuries,” Fadriga explains. “Because of climate change, crops have been dwindling and farmers are struggling to meet the ever-growing demand for cacao around the world.”

Above Photo: Jenni Miska/Unsplash

Photo: Jenni Miska/Unsplash

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This shortage, while alarming, does have its advantages according to Theo & Philo Artisan Chocolates founder Philo Chua, whose innovative chocolate creations include flavours that highlight local ingredients such as barako coffee and green mangoes. “Aside from challenges, I think opportunities also opened up,” he points out. “With all prices going up, the gap between international chocolate prices and domestically made chocolates has narrowed. Previously, local cacao prices had normally been higher, especially for good-quality cacao. Also, companies who had stock were able to supply the demand where others fell short, and that has allowed us to enter new markets.”

While many local chocolate artisans use locally grown cacao, they still feel the effects of the global shortage. Christian Valdes of CMV Txokolat admits that it was not immediately felt, but even local prices of raw materials started to creep up. “Initially, our company did not feel the effects as strongly, but because of the decline in global production; disruptions in trade routes due to geopolitical conflicts (like the attacks of the container shipping through the Suez Canal causing shipping to be diverted) further increasing shipping cost and affecting availability; and other challenges in cacao cultivation like low productivity have significantly increased our raw material costs, particularly for cocoa beans and chocolate,” Valdes enumerates. “Since then we have diversified our offerings, introduced promotions, improved our operations, improved customer business relations and enhanced accessibility to reach a broader market.”

Above Photo: Tetiana Bykovets/Unsplash

Photo: Tetiana Bykovets/Unsplash

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Auro Chocolate co-founder and managing director Mark Ocampo also feels the pinch of rising prices, yet he chooses to see the silver lining which is beneficial to our local cacao growers. “On a positive note, the shortage in the African region creates an opportunity for other cacao-producing countries such as the Philippines, to fill the gap in the global market. As a result, new markets are opening up for our partner cacao producer, who can capitalise on the growing demand for high-quality, sustainable cacao. This shift could lead to better economic prospects for the entire cacao industry in the country.”

This almost seems perfectly timed since the local cacao industry is experiencing a revival and would benefit from some much-needed attention. “While the cacao industry has been around the Philippines for a long time already, it died down back in the late 80s,” Chua explains. “There’s been a revival in the past decade, but that big time gap in the industry led to a loss of knowledge and other practices. As such, I think we're starting from scratch in a lot of ways despite the progress we've had thus far. New infrastructure, knowledge and practices have to be put back into place for the cacao industry to be at the same level as other countries.”

Above Photo: Rodrigo Flores/Unsplash

Photo: Rodrigo Flores/Unsplash

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Valdez stresses the need to further educate local growers and producers. “Aside from productivity there is a lack of proper knowledge on the cultivation and maintenance of the crop as well as proper post-harvest processing,“ he says, “as well as many issues on the business side of things, like pricing and proper marketing quality standards. Based on my observations, it is struggling to reach its full potential. However, with proper education and the adoption of sustainable farming and proper business practices, we can strengthen the industry and drive long-term growth.”

Still, the private sector has picked up on the scent of the local cacao industry’s growing potential, with Fadriga’s criollo nursery working overtime to keep up with the demand, which includes a collaboration with a sustainable farmer who aims to grow criollo on 100 hectares of farmland. Still, many much smaller endeavours are feeling the effect of the currently skyrocketing cacao prices and would hugely benefit from government assistance. “They (the government) can start with providing farmers with mechanical dryers,” Fadriga suggests. “When cacao seeds are not dried properly, they develop mould which is a huge loss to farmers. The lack of modern technology in most farms puts many local farmers at a disadvantage.” Ocampo believes that assistance should not only be limited to those who are just starting out but also for businesses that are already contributing to the economy. “We believe that both local and national governments should prioritise enhancing training programs and providing financial support to farmers, as well as funding research initiatives,” he stresses. “Moreover, it is important to offer additional assistance to businesses already making meaningful strides in addressing these challenges and driving positive change within the sector.”

Above Photo: Maria Georgieva/Unsplash

Photo: Maria Georgieva/Unsplash

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While the global cacao shortage seems to be an unexpected blessing to local farmers, balance needs to be regained for the entire industry to benefit. Knowledge is truly power, and as cacao producers and manufacturers continue to struggle through the crisis, learnings must be applied quickly and for the collective to act swiftly as a whole. “For manufacturers, it's important to diversify their supply. Currently, much of the cacao supply in the Philippines can be found in Davao, but it's good to also look at other areas outside Davao. An extra step, is to form relationships with farmers and also invest in the farmer to not only secure their supply but also get better quality output,” advises Chua.

Valdes recommends maximising the application and potential of cacao to promote self-sufficiency, for example, “a citrus fruit can be used in multiple applications such as syrups, candied fruits, dehydrated components, flavouring, thickener, and infusions. The coffee and teas that we use in our products go into creating organic fertilisers.” Ocampo offers a reality check and states that while much good-intentioned work is in place, we still have a long way to go. “We have been proactive in supporting local cacao farmers, improving sustainable methods, and investing in sustainable practices. But, we believe that for Filipino cacao manufacturers to be truly self-sufficient in the future, more immediate, coordinated action is needed from both the public and private sectors to address these issues effectively and at scale.”

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Jaclyn Clemente Koppe

Contributor, Tatler Philippines

Jaclyn Clemente Koppe is a food and lifestyle writer, as well as a consultant to some of the country’s beloved food and beverage brands. Her passion for food and drink is only surpassed by her devotion to her family, most especially to her soulmate, Pepa the poodle.

Understanding the global cacao shortage and how it impacts the Philippines