The chocolate industry in Ecuador is facing a drama that few imagine and that many prefer to ignore: while cocoa farmers celebrate that the international price has surpassed $10,000 dollars per ton, chocolatiers struggle to survive in a local market that demands unrealistic prices, as if we were still living in the era of traditional artisanal bars from Ambato (an area famous for chocolate workshops since the XIX century).
This absurd dilemma has put chocolate makers at an impossible crossroads: they buy their raw material at international market prices, regulated by the New York Stock Exchange, prices that depend on the drought in Africa and speculation in Europe. But they must sell their finished product in a national market that is becoming increasingly impoverished and that is not willing to pay the price of a chocolate bar with high cocoa content. The result is devastating: non-existent profit margins, businesses that close and a sector on the verge of collapse.
Cocoa: the Ecuadorian jewel that not everyone can enjoy
Ecuador, world-renowned for its fine-flavoured cocoa, should be a chocolate paradise. However, Ecuadorians face a paradox: we export the best of our production and are left with a domestic market that does not value (or cannot afford) quality. The rise in the international price of cocoa should benefit the entire production chain, but the reality is that this increase has deepened an unsustainable rift between farmers and chocolate makers.
On the one hand, cocoa farmers demand to be paid the price established on the New York Stock Exchange, taking advantage of the opportunity to receive profits for their work, since their income depends on a crop that has historically been poorly paid. But this just claim becomes a problem when the local industry does not have a system that regulates the prices of raw materials destined for domestic consumption. In other words, Ecuadorian cocoa has an export price, but local chocolate must be sold as if cocoa did not cost the international price.
Chocolate factories and Chocolate makers: victims of the local market
The Ecuadorian consumer, hit by the economic crisis, is not willing to pay more for a chocolate bar, regardless of the quality or production costs. Herein lies the big problem: chocolatiers cannot transfer the real cost of the raw material to their products without risking losing the few customers they have left. This creates a perverse dynamic in which profit margins disappear and companies become trapped in a downward spiral.
Meanwhile, cocoa producers are celebrating the rise in the international price, which on December 12 exceeded US$10,000. However, the reality for chocolate producers is very different: for them, this increase means higher costs and more restricted local markets.
A pending solution
It is clear that the sector needs an urgent and structural solution. The creation of a local commodity exchange to regulate the price of cocoa for domestic consumption could be an alternative, allowing chocolate makers to access this raw material at reasonable prices, without harming cocoa farmers. A national strategy is also required to educate consumers on the importance of paying fair prices for quality products.
Ecuadorian cocoa is a treasure, but its potential will not be fully exploited as long as the links in the production chain compete with each other, rather than working together. If we do not resolve this dilemma soon, we risk losing much more than a market: we will lose an essential part of our gastronomic culture and our history.
It is time for all stakeholders – producers, chocolatiers, consumers and authorities – to sit down at the table and find a solution that benefits everyone. Ecuadorian chocolate deserves better than this absurd paradox.
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