How Ecuador Can Ascend to the World’s No. 2 Cocoa Producer and What the Cacao Sector Must Do to Sustain Its Rise
- Gusi Ayu Putri Chandrika Sari
- 1 day ago
- 9 min read
Editor’s Note:
The shift occurring in the cocoa sector is a wake-up call for every global supply chain player. Ecuador’s rapid climb is unfolding precisely as climate shocks intensify, compliance demands expand, and data transparency becomes non-negotiable. As Ghana and Côte d’Ivoire face systemic challenges, Ecuador is stepping into a historic opportunity. But opportunity alone is not a strategy. This article unpacks the drivers behind Ecuador’s momentum and outlines the practical, data-driven actions that exporters, processors, and sustainability partners must take to keep Ecuador competitive in a rapidly evolving regulatory landscape.
Executive Summary:
Global cocoa supply is entering a structural transition. With Côte d’Ivoire and Ghana facing declining yields from swollen shoot disease, aging trees, climate stress, and illegal mining, Ecuador is expected to overtake Ghana and become the world’s No. 2 cacao producer by 2026. Record prices have accelerated farmer reinvestment, boosting productivity across Ecuador’s agroforestry-based cacao systems.
Price volatility is reshaping farmer behavior and sector stability. The recent surge has lifted incomes for an estimated 400,000 producers and exporters, but it has also increased exposure to risks, such as overreliance on high prices, reduced diversification, and rising security threats targeting cacao farmers in Ecuador, Peru, Venezuela, and Colombia. This trend is also evident in Colombia, where historically high cocoa prices are driving farmers to shift from illegal coca cultivation to cocoa, further tying livelihoods to volatile global markets (Infobae, 2025).
Data and traceability are becoming non-negotiable for market access. As the EU Deforestation Regulation (EUDR) takes effect, buyers require geolocation precision, deforestation-free validation, and transparent sourcing. Companies increasingly turn to traceability platforms like KoltiTrace MIS to consolidate farm data, monitor supply chain risks, and provide verifiable proof of compliance.
Table of Contents:
For decades, the global cocoa market has been dominated by West Africa, with Côte d’Ivoire and Ghana supplying more than half of the world’s cocoa (Reuters, 2025). Yet shifting environmental pressures, declining yields, and structural challenges have begun to reshape this long-standing dominance. In 2025, Ecuador, currently the world’s third-largest cocoa producer, is poised to surpass Ghana and become the world’s No. 2 cocoa producer (Reuters, 2025). This rapid ascent marks not only an economic milestone, but also a defining moment for the global industry, signalling a redistribution of production power that carries both opportunity and responsibility. Sustaining this momentum will require strengthened systems, data-driven governance, and coordinated action across the entire value chain.
A Historic Market Shift: Why Ecuador Is Rising Now
According to projections published by Reuters in September 2025, Ecuador is on track to produce over 650,000 metric tons of cocoa by the 2026/27 season (Reuters, 2025). By contrast, Ghana is expected to yield just around 600,000 tons during the 2025/26 cycle (Reuters, 2025). Ghana’s decline is driven by several compounding factors:
Weather instability affecting pod formation and yield cycles
Across West Africa, extreme heatwaves, irregular rainfall, and other climate-related shocks continue to reduce yields. Excessive rainfall in Ghana and Côte d’Ivoire during late 2023 triggered outbreaks of swollen shoot virus and black pod disease, both of which cause cacao pods to rot and harden (UNCTAD, 2024).
The persistent spread of the cacao swollen shoot virus (CSSV)
In Ghana, CSSV has infected approximately 590,000 hectares of the country’s 1.38 million hectares of cacao plantations. Within one year of infection, yields fall by about 25%, declining to 50% within two years. Most infected trees die within three to four years, and affected farms require full clearing before replanting (Nanyang Technological University Singapore, 2024).
Illegal gold mining encroaching into cacao-growing areas
Ghana’s illegal artisanal gold mining or known locally as galamsey, has degraded soil quality. Mercury and arsenic used in mining impede tree growth and fruiting, while the stripping of topsoil creates unfavorable microclimatic conditions for cocoa production. Economic uncertainty, including U.S. tariff concerns, has intensified the shift toward gold as a more attractive investment option (Food Navigator, 2025).
In contrast to West Africa’s production downturn, Ecuador has been one of the biggest beneficiaries of rising global prices. The cocoa price shock of 2024–2025 pushed international prices above US$12,000 per ton, more than double the previous year, driven largely by supply failures in key West African origins (Reuters, 2025).
The impact on Ecuador was immediate and dramatic. A France24 interview with an Ecuadorian farmer reported that his income had tripled. “Before, we could only earn enough to maintain the farm, now we can invest,” said cacao farmer Cergio Lema.
The national economic effect has been similarly significant. According to Ecuador’s central bank, cocoa exports surpassed banana exports between September 2024 and March 2025, the first time in six decades, despite bananas historically being Ecuador’s most iconic commodity (France24, 2025).
Cacao Farm-Level Investments Are Driving Yield Improvements
Ecuador’s rise in the global cocoa market is not accidental, it is the result of strategic reinvestment at the farm level supported by a unique alignment of economic incentives and sector-wide collaboration. According to Iván Ontaneda, Chairman of the National Association of Cocoa Exporters (Anecacao), the surge in global cocoa prices, combined with stronger public–private engagement, has enabled farmers to reinvest in their production systems. “Thanks to soaring world cocoa prices, farmers, backed by the public and private sector, are investing more and more in their plots and getting increased yields” (Reuters, 2025).
However, Ecuador’s new global standing is far from guaranteed. The structural vulnerabilities that have long challenged the cocoa sector, climate variability, pests and diseases, and price instability, have not disappeared. At the same time, international buyers are accelerating their demand for deforestation-free sourcing, traceability to the farm, and transparent sustainability data. Regulatory frameworks such as the EU Deforestation Regulation (EUDR) and emerging climate-reporting standards are transforming the rules of market access.
In this evolving landscape, staying competitive requires more than good harvests. To remain competitive, Ecuador must proactively invest in the systems, governance, and digital infrastructure that ensure its cocoa is not only abundant but compliant, traceable, and grown within environmental limits. Not only to safeguard production but to meet emerging global expectations around sustainability, traceability, and climate reporting. Maintaining its position as the world’s No. 2 cocoa producer will depend on whether the country can transition from reactive growth to strategic, coordinated sustainability action.
Below are the four strategic actions Ecuador must prioritize to secure and sustain its status as the world’s No. 2 cocoa producer.
Four Strategic Actions Ecuador Cocoa Businesses Must Take
1. Achieve Full Plot-Level Traceability to Meet Global Regulations
Traceability is rapidly becoming a non-negotiable requirement in the cocoa sector. With the EU Deforestation Regulation (EUDR) taking effect for large companies in 2025 and all companies in 2026, exporters must demonstrate that every cocoa shipment is deforestation-free, legally produced, and traceable down to the exact farm plot.
Exporters will be required to provide:
Geolocation coordinates of all farm plots
Evidence that no deforestation occurred after December 31, 2020
A Due Diligence Statement that includes all required information and is submitted to the EU Information System (EUIS)
The competitive advantage of traceability is not only to comply with EUDR, it is:
Stronger access to premium EU markets
Greater trust from multinational buyers
Higher chances of receiving price premiums
Lower risk of shipment rejections or trade restrictions
KoltiTrace MIS provides a complete, EUDR-ready traceability system that enables businesses to meet global regulations with accuracy and confidence. The platform captures verified farm geolocation data, maps plot boundaries, and runs automated deforestation checks against satellite layers to ensure compliance with the December 31, 2020 cutoff. It streamlines due diligence through integrated risk assessment, supplier profiling, and end-to-end chain-of-custody records. KoltiTrace MIS also generates Due Diligence Statements and prepares data for seamless EUIS submission. By unifying geospatial intelligence, traceability, and compliance reporting, KoltiTrace MIS gives exporters a clear, reliable pathway to secure EU market access while reducing regulatory risk.
2. Prioritize Cacao Farmer Capacity Building for Productivity and Consistency
Ontaneda notes that much of Ecuador’s cacao is grown under agroforestry systems that support biodiversity and are crucial to preventing the spread of disease common in monoculture farming, as seen in West Africa (Reuters, 2025). However, to sustain high output, Good Agricultural Practices (GAP) must be scaled consistently across all regions.
Training programs can help farmers optimize shade levels, diversify their plots, and increase resilience to climate variability. These interventions are essential not just for future output, but also for meeting sustainability standards demanded by international buyers.
KoltiSkills provides a structured and scalable capacity-building program designed by our team of expert agronomists to elevate farmer performance across entire supply chains. The curriculum is fully customized to each business’s needs, ensuring relevance, practicality, and measurable improvements at the field level.
3. Improve Financial Literacy and Farm Economic Management
The recent surge in farmer income brings both opportunity and risk. While some farmers have reinvested wisely, many lack the financial skills to navigate volatile commodity markets. Anecacao estimates that around 400,000 producers and exporters have benefitted from the price surge. However, this has also made cocoa producers targets for extortion gangs across Ecuador, Peru, Venezuela, and other South American countries (France24, 2025).
To address this, structured financial literacy programs could cover:
Budgeting and savings strategies during price peaks
Risk management tools such as crop insurance and price stabilization mechanisms
Investment planning for productivity-enhancing tools and long-term farm upgrades
Understanding cooperative finance, credit scoring, and digital payments
Strengthening financial literacy at scale can transform short-term profit spikes into sustainable wealth creation and reduce vulnerability when global prices eventually normalize.
KoltiSkills modules can be fully tailored to each business’s needs, including equipping farmers with practical financial management skills. This training is reinforced by Koltiva’s integrated digital finance ecosystem—such as KoltiPay in Indonesia—which helps smallholders manage their finances securely through premium distributions, agri-input financing, pay-later options, crop procurement, and cashless transactions. Each transaction is recorded with a detailed digital receipt, allowing farmers to track income and expenses, build financial discipline, and strengthen their eligibility for future credit. By combining targeted financial education with accessible digital finance tools, companies can help transform short-term price gains into long-term economic resilience for cocoa-producing households.
4. Strengthen Climate Resilience Through Sustainable Practices
Climate change poses one of the greatest long-term risks to cocoa production. Increasing temperatures, irregular rainfall, soil degradation, and disease pressure all threaten productivity. To future-proof the industry, Ecuador must build a low-carbon, climate-resilient cocoa system grounded in credible data. This begins with measuring farm-level carbon footprints. Without accurate baseline data on GHG emissions across fertilizer use, land use, soil carbon, and agroforestry, companies cannot design or verify meaningful climate strategies.
With emissions mapped, the sector can implement targeted interventions such as:
Planting shade trees and restoring soil organic carbon
Composting cacao pod husks as natural fertilizer
Reducing synthetic fertilizer dependency
Implementing water-saving irrigation systems
Supporting reforestation and biodiversity conservation
Therefore, sustainable agriculture certifications such as Rainforest Alliance, Fairtrade, EU Organic, Regen-agri, among others, play a key role in the responsible management of cocoa systems. They promote farming practices that conserve biodiversity, reduce the use of agrochemicals, and improve soil health. Additionally, these certifications guarantee fair labor conditions, compliance with local regulations, and promote traceability, creating a competitive advantage and access to international markets.
“The cocoa sector is entering a new era in which sustainability and traceability determine market access. Ecuador’s location in the tropical region, its favorable environmental conditions for cacao crops, and the recent increase in investments in this commodity production position the country to become a key player in international markets. However, capitalizing on this potential requires strategic alignment with emerging sustainability regulations and robust climate accountability measures.With tools like KoltiTrace MIS digital ecosystem, companies can measure emissions, improve their environmental performance, and prove compliance with global regulations—turning sustainability into a competitive advantage rather than a burden,” said Felipe Usuga, Senior Agronomy Officer, Koltiva
Ecuador is experiencing a rare confluence of economic opportunity and global market realignment. Rising prices, renewed farm investment, and declining production in West Africa have created ideal conditions for Ecuador to climb to the No. 2 globally. But maintaining this position will depend on the country’s ability to implement forward-looking strategies.
By investing in traceability, farmer capacity, financial literacy, and climate resilience, Ecuador can build a cocoa sector that is not only globally competitive, but also environmentally responsible and economically sustainable. The window of opportunity is open now—and the choices made today will determine whether Ecuador’s rise is temporary or truly transformational.
Author: Gusi Ayu Putri Chandrika Sari, Social Media Specialist
Subject Expert Matters: Felipe Usuga, Senior Agronomy Officer for Latin America at Koltiva
Gusi Ayu Putri Chandrika Sari combines her expertise in digital marketing and social media with a deep commitment to sustainability, supported by over eight years of experience in communications. Her work focuses on crafting impactful narratives that connect technology, agriculture, and environmental responsibility. She is driven by a passion for promoting sustainable practices through compelling, audience-focused content across a variety of digital platforms.
Felipe Usuga is a Forestry Engineer with a master’s degree in Science, Technology, and Innovation Management, specializing in nature-based solutions, sustainable agriculture, and carbon markets. He brings international experience across Latin America, leading technical and strategic projects in biodiversity conservation, agroforestry design, forest monitoring, and climate-smart land use. At Koltiva, he supports the Americas market by developing and adapting content on agronomy, sustainability practices, supply chain analysis, nature-based solutions (NbS), and EUDR risk analysis for LATAM countries.
Resources:
Aboa, A. (2025, July 9). West Africa facing 10% drop in cocoa output in 2025/26, industry sources say. Reuters. https://www.reuters.com/world/africa/west-africa-facing-10-drop-cocoa-output-202526-industry-sources-say-2025-07-09/
Angel, M. (2025, September 23). Ecuador set to become world’s No. 2 cocoa grower, industry head says. Reuters. https://www.reuters.com/world/americas/ecuador-set-become-worlds-no-2-cocoa-grower-industry-head-says-2025-09-22/
Bambridge-Sutton, A. (2025, March 10). Cocoa prices driven up by gold mining. FoodNavigator. https://www.foodnavigator.com/Article/2025/03/10/cocoa-prices-driven-up-by-gold-mining/
France24. (2025, June 24). Better than gold: How Ecuador cashed in on surging cocoa prices. https://www.france24.com/en/live-news/20250624-better-than-gold-how-ecuador-cashed-in-on-surging-cocoa-prices/
Muñoz Medina, L. (2025, July 7). De la coca al cacao: El modelo que está cambiando la vida de familias campesinas en Vichada. Infobae. https://www.infobae.com/colombia/2025/07/07/de-la-coca-al-cacao-el-modelo-que-esta-cambiando-la-vida-de-familias-campesinas-en-vichada/
Nanyang Technological University, Centre for African Studies. (2024. April 28). Cocoa production in Ghana and Côte d’Ivoire collapses. https://www.ntu.edu.sg/cas/news-events/news/details/cocoa-production-in-ghana-and-c%C3%B4te-d%27ivoire-collapses
United Nations Conference on Trade and Development. (2024, March 28). Chocolate price hikes: A bittersweet reason to care about climate change. https://unctad.org/news/chocolate-price-hikes-bittersweet-reason-care-about-climate-change
Comments