ECUADOR – Ecuadorian food industry players, especially in the cocoa, have posited the free trade agreement (FTA) their government has signed with China as a boon to the economy with an expectation of increased exports.
With the deal, which began with discussions 12 months ago, successfully concluded and signed, Ecuadorean exports, including cocoa, will have preferential access to China, and the South American country’s manufacturers will be able to acquire machinery and inputs at lower costs, Reuters reported.
China is one of Ecuador’s main trading partners, with bilateral trade estimated at more than US$10 billion annually.
“This trade agreement will allow preferential access for 99% of Ecuador’s current exports to China, especially agricultural and agro-industrial products such as shrimp, bananas, roses and flowers, cocoa, and coffee,” Ecuador’s production ministry said in a statement.
According to data from the Fine Aromatic Cocoa Observatory for Latin America, Ecuador produces only 4% of the world’s production of cocoa however, from the fine upper-class aromatic cocoa, the country is responsible for 70% of the world’s production.
The cocoa of Ecuador is called Arriba or Nacional because it grows only in Ecuador. Cacao has been declared by the Ecuadorian government as a “symbol product” for Ecuador.
The cocoa sector employs 5% of the rural economically active population, thus constituting a fundamental base of the family economy of the Coast, Andes foothills, and the Amazon area.
It involves around 150,000 families. Most, approximately 70%, are small-scale producers, 20% being medium and 10% large producers.
Still the world’s third largest cocoa producer behind Côte d’Ivoire and Ghana, Ecuador sets its eyes on doubling its output in seven years to reach 700,000 tonnes, according to the cocoa producer association APROCAFA.
With yearly production levels of around 320,000 tonnes, Ecuador’s ambitious plan revolves around its use of cocoa clone CCN-51; a high-yielding variety that has allowed the country to triple its cocoa volumes over the last decade.
Many of the large cocoa-growing companies are eyeing the Chinese market as a key destination for raw beans, semi-finished, and finished cocoa products.
“Chocolate is consumed differently in China than it is in Europe. Consumption is around festivals, and bigger festivals are a big push for chocolate,” said Nathaniel Durant, Chief Operating Officer (COO) of Niche Cocoa Industries, a Ghana-based cocoa processing company.
In June 2022, chocolate manufacturer Barry Callebaut opened its first coffee-buying, cleaning, drying, and export facility in Ecuador, called Taycan.
Barry Callebaut said the Taycan is Ecuador’s most state-of-the-art cocoa bean cleaning, drying, and export facility, and the US$10 million investment underlined its commitment to support the further development of the Ecuadorian cocoa sector.
In addition to being the hub for the export of the Group’s Ecuadorian cocoa beans, Taycan also offers a home to all Barry Callebaut’s employees in Ecuador.