High Value Crops: Cacao Industry in the Philippines

Philippine Cacao Industry Roadmap

In the recent years, the Cacao Industry has been gaining recognition in the domestic and export

markets as the supply and demand gap of cocoa beans is increasing. The world demand for cacao has

nearly tripled since 1970 growing at an annual rate of 3% with China and India growing at 7.9%. One of

the primary drivers of this increase is the growing middle class, increasing discretionary household

income in developing countries, new and innovative uses of cocoa in the food, cosmetics and

pharmaceutical industries, and the positioning of cacao as health food.

With the Philippines‟ location conducive for cacao production and accessible to domestic and foreign

trade, heightened the interest of local farmers and exporters to push for a more dynamic and

competitive cacao industry that can compete with other major cacao-growing nations.

But why Cacao? This is the primary question being asked by those who have reservations as to the real

potentials of the cacao industry. Basically, cacao may significantly contribute to poverty alleviation and

inclusive growth through livelihood and job generation. This is because cacao production only requires

small monetary investment or start-up capital. This explains why 90% of the growers are of small farm

holdings. The suitability of cacao as an intercrop for coconut and banana, the two-week harvest

interval, and the early gestation period of 18 months are some of the most valued advantages of this

high value crop. The early return of investments and high profitability of the product also ensure good

income augmentation potentials. Above all, the industry is market-driven considering that cacao has no

product substitute. Its diversified usage as food and non-food warrants a sustainable marketing

opportunity. The Philippines is a net importer of cacao on the other hand, global supply shortfall is

expected to be at 1 million metric tons (MMT) by 2020.

Given these opportunities, players across the Industry Value Chain must boost their productivity and

competitiveness in order to have a significant impact in the overall economic development of the

country. Thus, through the series of consultations with the private and public sectors, this 2016-2022

Philippine Cacao Industry Roadmap, anchored on the Value Chain Approach and aligned with the 2022

Cacao Challenge (specifically to produce 100,000 MT of dried fermented beans by 2022), is being

crafted to provide a harmonized direction and strategies that will serve as guide in the development and

strengthening of the industry.

The Roadmap hopes to establish a sustainable and competitive cacao industry, that is environmentally

sound, economically viable and socially desirable. As such, it is envisioned to spur development

through livelihood creation, job generation, and income augmentation thereby contributing to poverty

alleviation, inclusive growth, and peace and order attainment particularly in the rural areas.

A Philippine National Cacao Industry Council (Philippine Cacao) will also be created to spearhead the

development of the industry. This will be a private sector led council composed of public and private

sector representatives. To provide co-leadership, the Department of Agriculture will co-chair the

Council.

I. State of the Industry

a. Product

Theobroma cacao, the scientific name of Cacao, literally translates as “food of the gods”

in Greek. The name Theobroma cacao was first given to the cocoa tree by Carolus

Linnaeus –the Father of Modern Day Taxonomic Plant Classification. Cacao is the Mayan

root word to describe the tree and its product. It is grown mainly for its seeds known as

the cocoa beans which are used to make cocoa mass, cocoa powder and chocolate.

In the Philippines, there are three major cultivar groups being grown by farmers. These

are the Criollo, Forastero, and Trinitario cultivars:

The Criollo is considered as the most prized, rare and expensive variety. It is native to

Central and South America. It is believed that the 1st cacao seed planted in the

Philippines was the Criollo variety brought via the Acapulco-Manila Galleon Trade in

1670. Only 5% of the world‟s cacao production is Criollo. This variety is difficult to

grow, as extremely susceptible to pests and diseases. The beans are white to pale

pink in colour and recognized as a superior quality, less bitter and more aromatic.

Considered as the “Prince of Cocoas,” Criollo is an ingredient in premium chocolates.

The Forastero, a native of the Amazon basin, is the most versatile variety and most

commonly grown cocoa. It is mainly grown in Africa, Ecuador and Brazil and

accounts for 80% of the world‟s cocoa supply. It is significantly harder, disease

resistant and high yielding. Beans are purple-coloured and mainly used to give

chocolate its full-bodied flavor. They have bitter taste, thus, often blended with superior

cocoas.

Trinitario, the hybrid of Criollo and Forastero combines the best of the two other main

varieties: the hardiness and high yield of Forastero and the refined taste of Criollo. It is

the predominant fine flavor cocoa and can be found in all the countries where Criollo

cocoa was once grown including Southeast Asia and the Philippines. It is being used in

about 10% of the world cacao supply.

Cacao is said to be a non-self-pollinating plant thus, scientists and industry experts are

recommending to have at least 3-5 clones in one farm site to facilitate pollination. At

present, there are 15 approved varieties/clones registered in the National Seeds Industry

Council, to wit: UF18, BR25, K1, K2, PBG123, K4, K7, K8, K9, K10, ICS40, UIT1, TSO1,

TSO2 and TSO3. Of these major clones, six (6) are prevalently used, namely: UF18,

PBC123, BR25, K1, K2 and K9.

It is the main ingredient in chocolate production and there is no other crop or product that

can substitute it in as far as chocolate production is concerned. There are six (6)

intermediate products that can be derived from cacao beans: cocoa nibs, cocoa liquor

(tablea), cocoa cake, cocoa butter, cocoa powder and chocolate confectionary blocks. Its

diversified use, both for food and non-food, provides broader market opportunities. As a

health food, cacao is packed with vitamins and antioxidants that make it almost a super

food or a natural multivitamin.

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Cocoa-based products traded in the local and international market include:

 Wet cacao beans

 Ready to sow cacao seeds (seedling purposes)

 Cocoa nibs (beans, whole/broken, raw/roast

 Tablea (Cocoa paste or liquor, not defatted)

 Cocoa powder (not containing added sugar / other sweetening matter)

 Cocoa butter, fat/oil

 Chocolates

 Chocolate Confectionery

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