Cocoa prices

A Swiss organic cocoa processor has announced it has become the first Regenerative Organic Certified (ROC) certified supplier from Latin America through its subsidiary YACAO in the Dominican Republic, which works exclusively with small-holder farmers in the FUNDOPO cooperative. What does ROC stand for? Regenerative Organic Certified (ROC) is a relatively new certification for food, textile fibres and cosmetic products. ROC takes internationally recognized organic standards as its starting point and supplements them with critical additional elements such as soil health, animal welfare, and fair terms for farmers. It was brought into existence in 2017 by a group of farmers, business leaders, and experts called the Regenerative Organic Alliance. They aimed to create a holistic label that would promote soil health, ensure fair treatment for farmworkers, empower farmers, and improve animal welfare. That is reflected in its three main pillars: soil health, social fairness, and animal welfare. A spokesperson for Pronatec said: “We are proud to be now able to offer our clients the first ROC-certified cocoa from Latin America. The Regenerative Organic Certified (ROC) label supplements existing organic standards with sustainability, environmental protection, and social responsibility elements. We often hear ‘cocoa’ and ‘child labour’ simultaneously. Thankfully, the reality is very different regarding our subsidiary in the Dominican Republic and the cocoa-producing smallholders.”Pronatec also claims that since establishing YACAO to source its organic cocoa beans in 1999, there hasn't been a single child labour case in its supply chain – making the ROC certification process much more manageable.The company’s ROC certification has been a strategic decision to reach out to customers in the US and is expected to be a main topic at Pronatec’s first presence at Expo West in Anaheim, California, from 12-14. March 2024 (Organic Sector).Pronatec said that all children in its smallholder supply partner (FUNDOPO) receive formal education and are supported by the cooperative’s smallholder association, which provides them with school supplies, shoes, sports equipment, and toys. Many of FUNDOPO activities aim to support children in cocoa-producing communities. We can very quickly see if the FUNDOPO intermediaries are paying the right prices in all the regions. This way we can answer the prominent Fairtrade question: Who was making the money? - Kilian Moser, YACAO operations manager On a recent press trip at the end of 2023, ConfectioneryNews visited Pronatec’s impressive setup in the Dominican Republic and spoke with Kilian Moser, YACAO’s operations manager, on a visit to its main processing facility in Medina.In percentage terms, the Dominican Republic is the 10th largest producer in the world – and the number one producer of organic cocoa. At the end of last year, YACAO was it was also the largest organic processor on the island of Hispaniola, which it shares with Haiti. As ConfectioneryNews reported supply issues from the larger cocoa origin countries in West Africa are forcing buyers to look at other markets, especially when bulk cocoa ia priced higher than specialty cocoa because of the shortages.At the Medina site (and in three other similar facilities on the island), YACAO receives wet cocoa beans from the cooperative’s collection centres for fermentation in large sacks that are regularly turned for three to four days. The fermented cocoa is then spread on large wooden drying beds. It is raked under the sunshine before the beans are processed through a machine to get rid of any detritus before being packed into export big bags holding 1050 kg. They are then sent to the port for shipping to Europe and Pronatec’s own processing factory in Beringen, Switzerland.So far there is no major difference in the processing to the way that the majority of cocoa is treated in other parts of the world before it ends up in chocolate factories and turned into indulgent treats for the consumer.Quality controlHowever, Pronatec and its subsidiaries only deal in organic-certified cocoa and have been doing so since 1999. While it sells at a premium and has become increasingly in demand as consumer awareness of sustainability and health issues has become more important, it comes with a whole raft of checks and quality controls to ensure the integrity of its product.“The more you export, the more demanding your customers become, so quality control is significant. With organic, the controls start on the farm. Each farmer is visited at least twice a year by a technician to make sure he is abiding by the organic and fair trade standards. Once the cocoa reaches YACAO, there are different types of measurement and standards that are controlled. Through the process we make sure that we prepare the cocoa as well as possible so that it maintains its properties … that the humidity is proper…and that the beans are the right quality and size."So, if we store the cocoa, we must ensure that the humidity doesn't go up, or we risk losing the beans in that bag,” said Moser. Dominican Republic cocoa output Occupying the eastern two-thirds of the Hispaniola Island in the Greater Antilles Archipelago, the Dominican Republic is currently a world leader in organic cocoa, with a 60% volume of exports to premium markets. It is also the tenth-largest cocoa producer globally, producing approximately 77,681 tons of cocoa beans annually. The country has approximately 150,000 hectares planted with cocoa by about 40,000 producers, with 36,236 farms registered, of which 16.5% are engaged in the production of organic cocoa. Source: https://iica.int/ He explained that bean samples are sent to a lab in Berlin to check for contamination with fertilisers or pesticides, this is after a small check in laboratory on-site, where technicians also look for mould, insects, and germination.Once the results come back, Pronatec chooses to accept or reject the batch based on the results; if the cocoa fails the organic test, the beans will be sold on the open market to a conventional buyer with less demanding requirements. If Pronatec is happy, the beans are sent to the port in Santo Domingo and shipped to Europe.Most of the supply chain is digitalized, although the process starts with the farmer receiving a paper receipt for their beans from the collection point. This document is photographed and then uploaded into the system where all the details are checked in the office, like weight, date, and location, so the batch can be traced to the shipping container - and YACAO can easily trace the beans and provide all the information to Pronatec and the certification companies ready for export.“With the size and volumes we now have, we need digitalization of the supply chain; once it is in the system, you can’t tinker with the records,” said Moser. Besides saving massive amounts of administrative time on audits, for example, having a digital record also has other benefits.Traceability“If you have a contamination, you need to be really fast because if someone sprayed pesticides or there was a cross contamination from another farm or the public road, after three months, you would no longer be able to see with the naked eye if there was pesticide use on the farm, so before, it would take you weeks to go through your traceability before you can dispatch the internal control system – and then It becomes useless. So that's why Pronatec decided to start digitalization for traceability a long time ago.” The other benefit is that it has created price transparency in the value chain. Fairtrade demands that all farmers be paid the same price for their beans. “We can very quickly see if the FUNDOPO intermediaries are paying the right prices in all the regions. This way we can answer the prominent Fairtrade question: Who was making the money? Is it the middleman, or is it the farmer, so we have transparency in that as well.”As chief operations officer, it also makes Moser’s job a little easier because he can check the data, see weaknesses in the chain, focus on internal control systems in those areas, and relax a little on those performing up to scratch.CertificationsCertification is another area that sets Pronatec apart from most of the competition. As well as the newly introduced ROC certification, its organic cocoa is also certified by leading organizations, including: Fairtrade Fair Trade USA Rainforest Alliance Bio Suisse EU Bio USDA ORGANIC Naturland Fair for Life Although the various audits for these organizations take up a lot of Moser’s time because of the complexity of the rules, and he wishes there was just one institute to deal with, he asks the question why do we need organic certification?“And for us at FUNDOPO, YACAO and Pronatec, it's a straightforward answer- because we believe it's the right way to treat the earth and the certification is needed for the consumer to trust the products. In Europe the consumer can buy a lot of the products locally and even visit the farmer to make sure they like the way they threat the earth, the same consumers can’t check the cocoa farm their chocolate is being made of, they need the certification company to check that for them."The farmers are still very poor, said Moser, but there is a big positive difference from where they were 20 years ago. "The Cooperative FUNDOPO has many more members now so the effects of the Fairtrade premiums combine to be able to do bigger things and help more people make a living.”Moser said the ROC certification is not a bad idea. “Because you can have a warehouse with hydroponic plants and make it organic … but you would still not help the earth to recover from intensive agriculture.“So what they want and which makes, in my opinion, more sense for crops, is that you need to rotate crops that draw a lot of nutrients from the earth so that you farm in a way that you're not permanently damaging the earth and that you give the earth enough time to recover either by using organic fertilizer or by letting it sit still to recover.“For us working with organic agroforestry systems … we already cover most of that, but we do have to have the ROC label on the chocolate that the American consumer recognizes – and will therefore buy.”Sandro Marti, head of chocolate and marketing at Pronatec, made the point that the company also sources cocoa from other origin countries, including Panama, Peru, and Madagascar, the latter where it has also has a project for over the past 20 years, and where it sources spices such as vanilla working with its own people on the ground to make sure that supply chain is also not contaminated.EUDRThis is also an advantage to Pronatec because, with the new EU Deforestation Regulations about to come into force later this year, that challenge on the ground for most operators is a huge one because it is not only cocoa that has to comply with the laws – but also other raw ingredients like spices. Many processors and manufacturers may source cocoa butter from one country or supplier, cocoa liquor from another, beans from elsewhere, and spices from another. Everything must be traced, and an operator needs to know where all its raw materials come from to provide due diligence in its supply chain.For Pronatec, this is not such a problem, as it directly controls all aspects of its varied supply chain. Certified cocoa grown in agroforestry systems means that deforestation is not a concern – and it mainly operates in a country where, since the 1960s, there have been strict laws against chopping down trees without government permission.“We also have the advantage that for many years, we've been focusing on these other older certifications with Naturland, in particular to focus on biodiversity, soil protection, bird habitats, and so forth that most our farms are already certified,” said Moser.Cocoa trees are seen very much as part of the regeneration process in the Dominican Republic; for example, being planted where there was once a sugarcane plantation, and good cocoa farming is all about agroforestry management and not a mono-culture; trees are grown alongside for shading and or to grow coconuts or avocado for example. They are also grown on the foot of the mountains where other crops cannot be grown.Social conscienceAs well as an environmental conscience, YACAO also has a social one. Moser said that YACAO has 93 employees, a third of which are women, but in the head office in Santo Domingo, 69% of the workforce is female. “We also have a flexible employment policy so staff doesn’t lose their jobs if the harvest is low; they stay on the books on a retainer and make up the hours during busier harvest times. It provides more stability for them and for us to manage as we can have a more planned fiscal year, and we know what our costs are and don't have extreme peaks and challenges to find people when there is a strong harvest.“As far as we know, we are the only cocoa company that does this - everybody else will let people go when the cocoa harvest goes down.”Moser said the harvest has been pretty stable for the past three years in the Dominican Republic - despite extreme weather like a recent hurricane hitting the island. One of the struggles is keeping up with the demand for more beans from parent company Pronatec, which is a nice problem to have, said Moser.If it seems YACAO cannot supply beans fast enough, it’s because it has always played a long game where quality, rather than quantity, has been its main priority.

Cocoa prices

Related news

Follow us

Products

Webinars

Top Headlines

ConfectioneryNews

Resources