Brazil’s Cocoa Industry: Potential for Global Market Reclamation

A study by Instituto Aya reveals Brazil’s potential to capture 13% of the global cocoa market by 2030, generating $2.3 billion and creating 300,000 jobs. Brazil’s advantages include its established cocoa processing sector as well as agroforestry cultivation expertise. However, challenges like limited access to credit and low productivity levels need addressing.

Brazil, once a leading cocoa producer in the 1980s, has the potential to reclaim a significant position in the global market. According to a recent study by Instituto Aya, Brazil could capture 13% of the global cocoa market by 2030, generating up to $2.3 billion in revenue and creating approximately 300,000 jobs. Even under conservative estimates, Brazil might attain a 9% market share, amounting to $1.5 billion in earnings.

The study points to Brazil’s competitive advantages across all stages of the cocoa supply chain. With the assistance of Embrapa and the Cocoa Plan’s Executive Committee, Brazil stands out as a leading producer of cocoa seedlings and specialized machinery. Additionally, the country’s experience in agroforestry cocoa cultivation enhances its position in the market.

Opportunity exists within the agribusiness sector as degraded pastureland could be transformed into cocoa-growing areas. Advocates are pushing for cocoa to be recognized as a priority crop under a new government program to convert such land. However, challenges remain, including limited access to credit, with only 0.05% of agricultural credit allocated to cocoa production, coupled with low productivity and pest threats.

The integration of cocoa cultivation into forest restoration offers a promising expansion route. Though regulatory frameworks at the state level exist, federal laws governing this practice remain absent. The industrial sector shows promise, with major cocoa processors present and opportunities for growth in bean-to-bar and tree-to-bar markets.

To address industry challenges, it is recommended to establish favorable credit lines with lower interest rates and extended repayment terms. Proposed measures include leveraging the BNDES Climate Fund’s conditions for the cocoa sector and encouraging cocoa processors to enter into forward contracts to stabilize pricing and enhance credit access. Furthermore, improving rural technical assistance, along with increased research investment, will be crucial in advancing mechanization and addressing pest challenges in Brazil’s cocoa plantations.

In summary, Brazil has the potential to reclaim a significant role in the global cocoa market, with projections indicating 13% market capture by 2030, accompanied by substantial job creation and revenue generation. However, to realize this potential, it is crucial to address key challenges such as limited credit access and agricultural productivity while fostering integration into forest restoration. Industry growth will also depend on targeted investments in processing and supply chain enhancements.

Original Source: valorinternational.globo.com