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The Philippine 2020 Cacao Challenge

cacao challenge

There is a growing demand for cocoa products and the world may soon run out of chocolate- giving rise to the Philippine Cacao Challenge 2020. Given the current increasing demand in chocolate and cocoa products (paired with a dwindling supply of cacao due to an array of farming challenges), it is expected that there will be a cacao shortfall by the year 2020.

For a summary of the cacao supply deficit, our partners at the Mindanao Development Authority (MinDa) have developed a visual presentation about their program called the Cacao Double-Up Program. To learn more on the statistics of how there is going to be a deficit, continue reading below.

The growing demand for Cacao
graph 2 consumption

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The global demand for cacao has tripled since 1970. Although it took a slight dip during the financial crisis in 2008-2009, cacao’s worldwide demand has rebounded since and has been steadily increasing. Two of the largest markets, Europe and the US, have had an average of 3% annual growth over the years. According to the International Cocoa Organization (ICCO), the net imports for Europe did not go below 1,600,000MT and the US not below 780,000MT from 2004 to 2009. For the period of 2011-2012, the US cacao consumption was 763,000MT while parts of Europe consumed no less than 200,000MT each (Germany-324,000MT, France-225,000 MT and United Kingdom-225,000 MT). According to Bloomberg, the 2011 global sales for chocolates exceeded US$100 Billion. By 2017, it is expected to reach US$147 Billion.

Asia is one of the recently fastest growing consumers of cacao, experiencing a 12% growth between 2003 and 2008. In the Philippines, the average annual cocoa consumption is 50,000MT according to a Department of Agriculture (DA). Euromonitor International expects the Philippine chocolate market to grow by 13% by 2017. And that is forecasted to reach 100,000MT by 2020 (DA).

Factors for growing demand of cacao
According to DA, the following are some of the factors that are contributing to the increasing worldwide demand for cocoa:
– increasing awareness for health benefits of, and preference for, chocolate (and there is no substitute to cacao in chocolate making)
– expanding range of applications in food, beverage, cosmetics and pharmaceuticals
– increasing disposable income of middle class

Supply of cacao
According to the Department of Agriculture, the global demand is expected to reach between 4.7 Million to 5 Million metric tons by the year 2020, and global supply will be at a deficit of 1 Million MT. For the Philippines alone, the local consumption is at 50,000MT annually, but the local supply is only around 10,000MT, making the country a net importer. This looming deficit has given rise to the Philippine Cacao Challenge, which commits the Philippines to producing 100,000MT by the year 2020 and onwards.

The focus now is on Mindanao, the southernmost group of islands in the Philippines, which accounts for 90% of the Philippine cacao production, with 80% coming from the Davao Region alone. Majority of Mindanao cacao producers are small farm holdings. Based on aggregate data from Philippine Provincial Agriculturist Offices (PAGROs), Davao Region has more than 20,000 hectares of cacao farms, with Davao City having the largest area of 6,060 hectares.

Despite the growing interest in Philippine cacao, this proves that much work still needs to be done. Stay updated on CIDAMi News, Events and our Cacao Watch Blog and learn how you can contribute towards a unified Philippine cacao brand.

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