El Salvador is the frontrunner in cocoa sales, outperforming its Central American counterparts and achieving record-breaking prices before the historic surge in the international market.

Prior to the unprecedented spike in global prices, Salvadoran cocoa boasted the highest value per tonne exported in the region. The sensory attributes of Salvadoran cocoa have positioned it as the highest-paid grain in Central America, fetching over $5,000 per tonne, as reported by the Cocoa Alliance.

Jairo Andrade, the program director, emphasized that Salvadoran cocoa has earned prestige in the specialized segment despite its low export share. «The issue is not gaining market share but rather volume,» he pointed out.

On average, a tonne of Salvadoran cocoa is exported for $5,142.86, the highest figure in the SICA region (Central America and the Dominican Republic). Belize follows with $4,708.33 per tonne, and Honduras with $4,006.49.

Guatemala averages $3,934.5, Costa Rica at $2,992.7, Panama at $3,732.6, the Dominican Republic at $2,882.6, and Nicaragua at $1,562.17 per tonne of cocoa.

According to the Cocoa Alliance data, El Salvador exports slightly over $5.8 million in cocoa and derivative products, surpassing Belize’s $1.01 million and Honduras’ $1.2 million.

Despite its small volume, El Salvador’s cocoa prices even surpassed the average quoted on the New York Stock Exchange, which recently broke a six-decade record. This surge is attributed to the risk of a deficit due to a decline in production in West African countries, the major global suppliers, caused by heavy rains over the past two years.

Cocoa futures on the exchange were initially at over $2,700 per tonne, skyrocketing to more than $6,000 in early February.

Andrade noted that Salvadoran producers were receiving more than double the reference price on the New York Stock Exchange. However, he cautioned against considering this a significant additional benefit for local cocoa farmers since the primary destination for the harvest is domestic consumption.

Out of the over 1,200 tonnes obtained in the 2022-2023 cycle, at least 30 tonnes were destined for Europe, the main buyer.

«In El Salvador, there is a high cocoa consumption culture. So, if the domestic market is the main destination for national production, there lies a problem,» he added. «If the final consumer was paying $1 for a small bag or a chocolate bar, it’s challenging to bring it to the market at $2. The demand for cocoa in the domestic market will also be restricted if prices rise to this extent,» he added.

A similar situation will occur in export values, warned Andrade, as the purchasing capacity of consumers is not «elastic» enough. «The increase in cocoa prices for export will happen, but not to the levels of the international market because it’s not feasible to pay those prices,» he clarified.

Adding to market challenges are disruptions in the harvest in Latin America due to the El Niño climatic phenomenon, associated with periods of drought followed by heavy rainfall.

In El Salvador’s case, Andrade detailed that the rains from the Julia storm in October 2023 caused plants to abort flowers, leading to a delay in the cocoa year, which was supposed to start between April and May 2024. However, he estimates that production will remain above 1,300 tonnes.

While cocoa cultivation is considered ancient, its areas diminished with the mass cultivation of sugarcane and basic grains. The Cocoa Alliance, a program initiated in 2014 to revitalize the sector, records over 5,000 hectares of young plantations in El Salvador. Over 2,000 producers, mainly former coffee growers who turned to cocoa due to the decline in coffee prices, participate in the sector. In 2023, $6.2 million worth of cocoa was exported to 17 countries, as reported by the Central Reserve Bank (BCR).