Surge in cocoa prices prompts Ecuador to boost output

BRUSSELS, April 23 (Reuters) - Ecuador's annual cocoa production is on course to hit 500,000 metric tons in the next two years, potentially overtaking Ghana as the world's second-largest grower, the head of Ecuador's cocoa exporters association said.

Merlyn Casanova, Anecacao's executive director, told Reuters at the World Cocoa Conference in Brussels that the blistering world cocoa price rally had prompted Ecuadorian farmers to invest heavily in their plots.

World cocoa prices have nearly tripled in the past six months after adverse weather and disease slashed output in Ivory Coast and Ghana, who together produce about 60% of the world's cocoa.

Ecuador, currently the world's third largest cocoa grower, is on course to produce 437,000 tons this season versus 413,000 last.

Casanova noted that Ecuadorian cocoa farmers receive between 80-90% of the world price. This compares favourably with Ivory Coast and Ghana, where farmers receive at best 60-70% of the world price, and are currently being offered much less than that.

If cocoa trees are pruned and treated with fertiliser and pesticides, yields can rise significantly.

Casanova, however, expressed concern that Ecuadorian cocoa farmers might struggle to sell their beans to Europe next year, thanks to a European Union law banning imports of commodities linked to deforestation.

The law requires EU importers of cocoa and other commodities to prove their goods are not contributing to forest destruction by, for example, tracking and tracing their beans down to the plot of land where they were grown.

Casanova said Ecuador did not have a national mapping and traceability system for cocoa, and was currently seeking funds in order to set one up.

It is very late in the day to start the process as the EU law comes into effect at the end of 2024.

Some private companies in Ecuador are able to trace their cocoa, Casanova noted, but their coverage is patchy and a national system is still required.

Europe is the world’s largest cocoa consumer, processing about 35% of the world’s chocolate making beans. (Reporting by Maytaal Angel Editing by David Goodman and Mark Potter)