Better than gold: how Ecuador cashed in on surging cocoa prices
Cocoa plants are pictured at a plantation managed by the Schmidt Agricola farming group in Bahia state, Brazil.
Image: Moises Almeida Schmidt
In Ecuador, farmers who bet on cocoa beans rather than bananas, the country's top agricultural export, are cashing in as a global shortage of the main ingredient in chocolate feeds a price bonanza.
Cocoa is now a billion-dollar business in the Andean country, rivalling gold, copper and silver as well as the ubiquitous banana.
Near the Pacific port city of Guayaquil, in a region called Milagro (Miracle), 50-year-old farmer Cergio Lema can scarcely believe his luck.
A few years ago, the price of cocoa "was so low you could only earn enough for the upkeep of the farm," he told AFP as he strolled through his plantation, examining the oblong cocoa pods ripening on his trees.
But in the past two years, poor harvests linked to climate change and disease in Ivory Coast and Ghana, which together account for over half of global cocoa output, have whipped global prices into a froth.
Lema's income has more than tripled -- from 100 dollars for a 100-kilo (220 pound) sack of the beans packed inside each pod, to 350 dollars per sack.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
Nowadays he dreams about expansion.
"I have the vision of saving some money, taking out a loan, and buying another plot of land," he said.
In 2024, Ecuador's cocoa exports amounted to 3.6 billion dollars, 600 million dollars more than mining.
Between September 2024 and March 2025, the value of cocoa exports surpassed those of bananas, of which Ecuador is the world's top exporter, for the first time in six decades, according to the central bank.
Marco Vasquez used his bonanza to modernize his farm in Los Rios province, in the southwest of the country.
"With the previous prices, it was impossible to invest, but now I've bought more seeds and constructed a small bridge to cross the stream that used to flood the plantations," the 42-year-old told AFP in a telephone call.
Gangs sniff opportunities
Ecuador, believed to be the original home of cocoa, is the world's third-largest producer of the so-called "food of the gods," according to its agriculture ministry.
It is also the biggest exporter of fine flavor cocoa, a premium variety prized by chocolate makers for its rich, fruity taste.
But 90 percent of its production is of CCN-51, a genetically modified variety created in the 1980s to resist the bugs behind an outbreak of cocoa swollen shoot virus (CSSV), a disease ravaging crops in Ivory Coast and Ghana.
"The current prosperity is no accident; we are reaping the benefits of years of private investment and research into a resilient variety," said Ivan Ontaneda, president of Ecuadoran cocoa exporters group Anecacao.
African cocoa crops have also been wiped out by heavy rains and extreme drought, both of which experts have linked to climate change.
In December 2024, international cocoa prices hit a record $12,000 per metric ton on the back of the shortages, before falling back to about $8,500 dollars currently.
Anecacao estimates that around 400,000 producers and exporters have benefitted from the price surge.
But the boom has left a bitter taste for some: cocoa growers are growing targets for the extortion gangs that hold businesses to ransom across Ecuador, Peru, Venezuela and other South American countries.
The rush to cash in on high prices also risks reputational damage to Ecuadoran cocoa.
Environmental groups have repeatedly warned of rampant deforestation related to cocoa production.
Despite the complaints, the European Commission in May kept Ecuador off its highly anticipated first list of countries at "high risk" for deforestation.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
3 hours ago
- IOL News
Investor sentiment brightens for South African platinum miners as prices rebound
Johannesburg Stock Exchange JSE A higher net of 50% of managers surveyed said they see the South African equity market as undervalued while a slightly higher net of 60% see more 'Buy' than 'Sell' opportunities, noted the report. Image: Gianluigi Guercia / AFP Tawanda Karombo Investor sentiment towards South African platinum miners has shown a marked improvement recently, buoyed by a significant rise in platinum prices, signaling a potential shift in the market landscape. After enduring a protracted period of depressed investor interest driven by low prices and concerns about the market's stability—largely influenced by the increasing popularity of electric vehicles—platinum group metals are experiencing a notable resurgence. Mining analyst Keenen Du Toit this week said that the platinum prices this month 'jumped to $1 300 per ounce – the highest since 2014' although 'still significantly lagging the big move up' in gold. 'Historically the PGM basket price has traded closely to gold, and even above in many cases,' said Du Toit. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Now, South African fund managers surveyed by Bank of America (BofA) Securities said on Tuesday that investors have become overweight on platinum. This represents one of the biggest shifts as the fund managers positioning on platinum shifted from underweight to overweight. 'Biggest gain in platinum sector positioning,' said BofA in its June 2025 South Africa fund manager survey. This high positioning for platinum was 'relative to history in software, gold, retail and food producers and bonds.' This is despite the World Platinum Investment Council recently saying full-year output will still be 6% lower than last year 'since South African producers will not benefit from the large drawdown of work-in-process inventory that occurred' last year. Besides the inclination towards platinum, South African fund managers have exhibited 'low positioning' in healthcare, offshore, telecom and cash. The biggest falls were recorded for heavy industrials and cash. The latest survey marked the return of rand hedges, with a net 30% of managers overweight on equities after moving overweight to bonds and underweight on cash. 'They want to invest cash. Preferred sectors are banks, apparel retail, software (while they) disliked healthcare, real estate, food producers,' noted the BofA report. 'Resources (platinum, chemicals, miners) gained over local defensives like food producers, healthcare, life insurance).' A higher net of 50% of managers surveyed said they see the South African equity market as undervalued while a slightly higher net of 60% see more 'Buy' than 'Sell' opportunities, noted the report. In terms of government reforms, 15% of surveyed fund managers see 'reforms accelerating' against a peak reading of 56% for September 2024. Many fund managers cited 'weak earnings' as a major concern while they also see 'weak consumer on the radar' despite policy shifts to the left easing. Fund managers moved overweight on South African bonds, with fewer wanting to buy government bonds again this month. Surveyed respondents were in consensus that the South African repurchase rate (repo rate) will bottom in the third quarter, while they expected the country's 10-year yields to trade at 8.97% if the 3% inflation target is maintained. 'Economic optimism slightly more positive. +12M yield curve forecast falls 25 basis points. South Africa, we need reform and growth, to put South African citizens first, and a weaker dollar (outside a global recession),' BofA said. Alongside this, South Africa's fiscal dominance concerns were elevated compared to historically, despite showing improvement recently with weaker dollar and rising precious metal prices. Managers now expect a firmer rand, lower bond yields and a lower repo rate of nearly two 25 basis points cuts from today. BUSINESS REPORT
IOL News
9 hours ago
- IOL News
Better than gold: how Ecuador cashed in on surging cocoa prices
Cocoa plants are pictured at a plantation managed by the Schmidt Agricola farming group in Bahia state, Brazil. Image: Moises Almeida Schmidt In Ecuador, farmers who bet on cocoa beans rather than bananas, the country's top agricultural export, are cashing in as a global shortage of the main ingredient in chocolate feeds a price bonanza. Cocoa is now a billion-dollar business in the Andean country, rivalling gold, copper and silver as well as the ubiquitous banana. Near the Pacific port city of Guayaquil, in a region called Milagro (Miracle), 50-year-old farmer Cergio Lema can scarcely believe his luck. A few years ago, the price of cocoa "was so low you could only earn enough for the upkeep of the farm," he told AFP as he strolled through his plantation, examining the oblong cocoa pods ripening on his trees. But in the past two years, poor harvests linked to climate change and disease in Ivory Coast and Ghana, which together account for over half of global cocoa output, have whipped global prices into a froth. Lema's income has more than tripled -- from 100 dollars for a 100-kilo (220 pound) sack of the beans packed inside each pod, to 350 dollars per sack. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Nowadays he dreams about expansion. "I have the vision of saving some money, taking out a loan, and buying another plot of land," he said. In 2024, Ecuador's cocoa exports amounted to 3.6 billion dollars, 600 million dollars more than mining. Between September 2024 and March 2025, the value of cocoa exports surpassed those of bananas, of which Ecuador is the world's top exporter, for the first time in six decades, according to the central bank. Marco Vasquez used his bonanza to modernize his farm in Los Rios province, in the southwest of the country. "With the previous prices, it was impossible to invest, but now I've bought more seeds and constructed a small bridge to cross the stream that used to flood the plantations," the 42-year-old told AFP in a telephone call. Gangs sniff opportunities Ecuador, believed to be the original home of cocoa, is the world's third-largest producer of the so-called "food of the gods," according to its agriculture ministry. It is also the biggest exporter of fine flavor cocoa, a premium variety prized by chocolate makers for its rich, fruity taste. But 90 percent of its production is of CCN-51, a genetically modified variety created in the 1980s to resist the bugs behind an outbreak of cocoa swollen shoot virus (CSSV), a disease ravaging crops in Ivory Coast and Ghana. "The current prosperity is no accident; we are reaping the benefits of years of private investment and research into a resilient variety," said Ivan Ontaneda, president of Ecuadoran cocoa exporters group Anecacao. African cocoa crops have also been wiped out by heavy rains and extreme drought, both of which experts have linked to climate change. In December 2024, international cocoa prices hit a record $12,000 per metric ton on the back of the shortages, before falling back to about $8,500 dollars currently. Anecacao estimates that around 400,000 producers and exporters have benefitted from the price surge. But the boom has left a bitter taste for some: cocoa growers are growing targets for the extortion gangs that hold businesses to ransom across Ecuador, Peru, Venezuela and other South American countries. The rush to cash in on high prices also risks reputational damage to Ecuadoran cocoa. Environmental groups have repeatedly warned of rampant deforestation related to cocoa production. Despite the complaints, the European Commission in May kept Ecuador off its highly anticipated first list of countries at "high risk" for deforestation.
IOL News
12 hours ago
- IOL News
What the oil price says about the Iran crisis
In an aerial view, oil storage tanks are seen at the Enterprise Sealy Station on June 19, 2025 in Sealy, Texas. Oil prices have spiked over concerns that the Israel-Iran war could lead to a broader conflict involving the United States. Image: Getty Images via AFP The ongoing conflict in the Middle East continues to unsettle markets – but perhaps to a lesser degree than investors feared. Despite the intervention of the US, markets' reaction has been contained. Oil prices initially rose, reaching over $81 (R1465) a barrel, but quickly fell back to their range of the previous week. Global conflict often transmits into wider economic and market performance via inflation, and energy prices are a key contributor. This is why, during geopolitical flashpoints, the oil price becomes a point of focus. What factors are influencing oil prices in relation to today's Middle East crisis? Oversupply of oil keeps prices under $80 a barrel The global economy currently enjoys a healthy oil surplus. This helps keep prices in the mid to low $70s, a historically moderate range. Despite the events of recent days, there has not yet been any significant disruption in oil flows from the region. A risk premium is already priced in Following the initial exchange of fire between Israel and Iran, the oil price rose as the market responded to potential future disruptions in supply. Our calculations suggest today's price includes a 20% 'risk premium', already taking into account possible future disruption. With no short-term supply disruption and this additional risk already priced in, the market remains relatively stable for now. Concerns over the Strait of Hormuz risk may be overstated How Iran responds is vital. It is frequently reported that one response could include 'closing' the Strait of Hormuz, a sea passage critical to global oil transit. However, the Strait is a comparatively wide channel of international waters and cannot, in practice, be 'closed'. More importantly, while the targeting of shipping remains a theoretical risk, much of the oil passing through the Strait originates from Iran's neighbours (see table below). Disrupting the Strait of Hormuz would require aggressive action against international shipping, risking further isolation for Iran and the potential to draw other parties into wider conflict due to breaches of international maritime law. Who sends oil via Strait of Hormuz? Image: Supplied Inflationary threat only starts to impact at c$100 Since Israel's attack on Iran on 13 June, Brent crude price jumped 10%. If it settles at this level, it implies that G7 energy inflation will be a little over 5% over the next year (see chart below). This is not likely to lead to broader inflation pressure. Historically, a material inflationary threat typically only emerges when oil prices rise by 50% or more (see chart below). This would require Brent prices to move above $100 per barrel, which would need to happen before we see a pronounced impact on energy inflation rates. As we have pointed out before, the relationship between oil prices and inflation suggests that every 10% rise in oil prices adds just 0.1% to wider inflation. Oil prices need to top $100 for energy inflation to rise significantly Image: Supplied
