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Cacao Industry Profile

Cacao (Theobroma cacao L.) tagged as ā€œfood of the godsā€ is a perennial crop that has a great potential market value in the world. It is grown for its beans, which are processed into tablea, cocoa powder, nibs, butter, paste/liquor and chocolate confectionery. These products gained popularity not only in the chocolate industry but also in cosmetics and pharmaceutical industries. Cacao production is labor intensive, which is primarily produced by hand thereby making it an important source of livelihoods. Cocoa-chocolate industry is a multi-million-dollar industry that connects cocoa bean producers with manufacturers and consumers of chocolate. The growing demand on cacao and chocolate products both in the international and local market presents its promising contribution to the countryā€™s economic development.

Globally, cocoa farmers produce around five million tons of cocoa beans per year. Of the total production, 70% comes from Africa (mainly from West Africa), 19% from Asia and Oceania and 11% from the Americas. The biggest cocoa-growing countries are CĆ“te d’Ivoire (Ivory Coast) and Ghana, accounting for more than half of the worldwide cocoa production. More than a third of the cocoa beans are processed in Europe (Swiss Platform for Sustainable Cacao, 2021). According to the World Cocoa Foundation (WCF) there are 5-6 million cocoa farmers worldwide, and the number of people who depend upon cacao for their livelihood is 40-50 million.Ā 

Problems in the Industry

The Philippines is one of the countries in Asia seen to have a competitive advantage for cacao production due to its strategic location, good climatic condition, and favorable soil. However, despite its competitive advantage, cacao production in the country is still unable to meet the current requirements of the growing cacao-based industry due to several problems affecting the industry, and thus resort to importing cacao beans from other producing countries. Some of the identified impediments to cacao production in the country include:

  • Low productivity level, less than 2kg/tree/tree;
  • Inadequate skills of cacao farmers and/or inappropriate technology used due to varying technologies and protocols introduced;
  • Limitation on the government extension services/technology transfer on cacao production;
  • Production Issues: Area suitability, low organic matter, climate change, absence of mitigating measures against typhoon/flood and prevalence of pest and diseases; Clonal compatibility, too much use of plastic sleeves, etc;
  • Low Quality of Beans: Inadequate skills on post-harvest and bean grading, limited access to post harvest facilities and low level of awareness on quality & standards;
  • High cost of production inputs particularly fertilizer, pesticide
  • Inadequate Farm-to-market Roads (FMR), logistics;
  • Inconsistent/inaccurate industry production database.

Data Source: Philippine Statistics Authority. 1990-2022.

Notes:

  • Volume of production of cacao in metric tons (MT)
  • Area of production of cacao in hectares (ha)
  • Yield of cacao production in metric tons (MT)
  • Utilization of cacao in thousand metric tons
  • Utilization of cacao per capita in thousand metric tons
  • Value of Production at Current Prices in Million PhP

  • Value of Production at Constant 2018 Prices in Million PhP
  • Gross Value Added at Constant 2018 Prices in Million PhP
  • Gross Value Added at Current Prices in Million PhP
  • Gross Supply of cacao in metric tons
  • Farmgate price of cacao in Pesos per kilogram

ISP for Cacao

PCAARRD ISP on Cacao envisions to increase cacao bean yield, thereby increasing income
of smallholder cacao farmers in the countryside.

Strategic R&D

Strategic R&D is DOST-PCAARRDā€™s banner program comprising all R&D activities that are intended to
generate outputs geared towards maximum economic and social benefits

Technologies

Products, equipment, and protocols or process innovations developed to improve productivity, efficiency,
quality, and profitability in the agriculture and aquatic industries, and to achieve sustainable
utilization and management of natural resources

Technology Transfer Initiatives

Technology transfer initiatives ensure that the outputs of R&D and innovations are transformed
into viable and applicable technologies that help intended users

Capacity Building

Capacity building efforts of DOST-PCAARRD seek to develop and enhance the R&D capabilities of researchers
and academic or research institutions through graduate assistantships & non-degree trainings
and development and/or upgrading of research facilities

Manpower Development

Policy Research & Advocacy

Analysis of policy concerns and advocacy of science-informed policies ensures that the AANR policy environment is conducive for S&T development
and investments
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Competitiveness of Philippine Cacao Production under the ASEAN Economic Community

Producing cacao in the country was found to be cheaper relative to importing from other countries, which makes Philippine cacao competitive under the import substitution scenario. This implies that the country should focus on improving the local industry. Sadly, results show that the country will lose its import competitiveness if yield (1.50 mt/ha) declines by only 9 percent. However, it also highlighted that the country is close to becoming export competitive if given a 2 percent increase in yield or a 2 percent decrease in domestic cost.

Reference:

LapiƱa, G. F. and Andal, E. T. (2017). ASEAN Economic Community: Opportunities and Challenges for the Crops Sector. Los BaƱos, Laguna, Philippines: Philippine Council for Agriculture, Aquatic and Natural Resources