June 10 (Bloomberg) -- Colombian cocoa growers are holding talks with some of the world’s top chocolate makers including Barry Callebaut AG and Ferrero SPA in a bid to replicate the success of the country’s high-end coffee industry.
The National Cocoa Growers Federation, which also has held discussions with Spain’s Natra SA and Dutch Cocoa BV, plans to take output from about 50,000 tons this year to 1 million tons over the next two decades, Federation President Eduard Baquero, who is meeting chocolate producers in Amsterdam this week, said in an interview. The Netherlands is the biggest buyer of cocoa.
With cocoa prices surging 14 percent this year to three-year highs on prospects that demand outstrips supply, the federation is hoping chocolate producers will pay an additional premium for Colombia’s product. Juan Valdez, the Colombian coffee chain taking on Starbucks Corp. in global markets with the country’s mild arabica bean, is being held up as a model for the cocoa industry to follow.
“Colombian coffee is reputed to be the smoothest in the world, but our cocoa is also fine in terms of flavor and aroma,” Baquero said June 5 from his Bogota office, a cocoa plant swaying in the corner. “The aim is to get chocolate makers in Belgium, Switzerland, the Netherlands and across the globe to use it.”
Colombia’s production of the chocolate-making ingredient is all fine or flavor beans, while global output is mostly of the bulk or ordinary variety, he said.
To meet the ambitious production target, Colombia will graft new plants into about 80,000 hectares (200,000 acres) of existing cocoa plantations and plant 100,000 hectares of new crops as part of a goal of reaching 1 million hectares, Baquero said.
The expansion plan would see Colombia overtake Ghana, Indonesia, Ecuador and Brazil. The Ivory Coast is the biggest producer with output of about 1.55 million tons, according to the International Cocoa Organization, or ICCO.
As part of a cocaine eradication program, Colombia’s government is promoting cocoa as a substitution for coca as the two plants require similar growing conditions, Baquero said.
Latin America’s oldest rebel group, the Revolutionary Armed Forces of Colombia, or FARC, reached an agreement with government negotiators May 16 in Havana on tackling illicit drugs, one of six agenda items in peace talks aimed at ending Colombia’s five-decade guerrilla insurgency.
“Cocoa has helped many people leave the conflict,” Baquero said. “Revenues from cocoa have helped many others to avoid it.”
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