Venezuela has been historically known to produce and export high-quality cocoa beans. But due to the recent US sanctions, many traders have entered the cocoa export business as cocoa is one of the few commodities excluded from the US sanctions. A significant amount of exporters are sacrificing quality in favor of quick cash. Cocoa bean traders from New York said the quality of Venezuelan beans has deteriorated in recent seasons, reducing their premium appeal. Due to the decreased quality and thus the decreased prices for Venezuelan cocoa beans in the New York International Commodities Exchange, seasoned cocoa bean exporters have to focus on quality, traceability, and sustainability to command higher prices and stay competitive.
Venezuela’s production volume in 2018 was approximately 17K metric tons and 50% of the production was destined for export. Official data is not available for 2019, but ESAICA, a Venezuelan cocoa bean exporter, expects that both production and export of cocoa beans will increase because both the total cocoa bean harvest area and the number of cocoa bean exporters have increased.
The influx of new cocoa beans exporters is raising the domestic price of raw cocoa beans for existing exporters. For example, Max Figueroa, the export manager of ESAICA states that his company is now paying almost 50% more for its cocoa beans.
Currently, there is a trend towards organic and sustainable products among consumers in the cocoa beans and the chocolate market. Consumers are also paying more attention to Corporate Social Responsibility (CSR) and origin stories of cocoa beans. These trends, coupled with the damaged reputation of Venezuelan cocoa beans, is forcing exporters to improve their production and distribution standards.
In previous years, the company has been exporting to Italy, Germany, the Netherlands, and Switzerland. ESAICA is also interested in penetrating the Asian market, especially the Japanese market since Japan’s chocolate market has been expanding rapidly. As the company mainly exports to well-developed countries, quality and sustainability are important factors. The company ensures the quality of its cocoa beans by buying the best raw materials from its partnered farmers. Venezuelan cocoa beans are classified as 100% Fine or Flavor by the International Cocoa Organisation (ICCO), states Figueroa. The company enhances the flavor of its cocoa beans through meticulous fermentation and drying processes. Only 5% of the cocoa beans traded worldwide are considered Fine or Flavor by ICCO.
The company has also implemented a traceability system to establish sustainable production of cocoa beans. The traceability system begins with the crops when the pots are pulped. Then during the fermentation and drying processes, the company splits the lots according to the dates and materials received. After these steps, the company cleans and selects the highest quality lots and exports them to customers. Currently, ESAICA maintains its traceability system by filing information in the company’s internal system. However, in a few months, the company expects to implement a blockchain system that can better monitor and trace the production of its cocoa beans. To remain competitive in the global market, cocoa bean exporters need to place more emphasis on quality and sustainability of their products.