(Bloomberg) — Valuable cocoa beans pour from the pipe of what looks like a small train making its way through tropical fruit trees in Brazil, leaving only husks on the ground.
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The machine is bringing automation to the husking of ripe cocoa pods — a significant improvement over the traditional labor-intensive harvesting process of picking fruit from trees and manually cutting through the stalks with a blade.
It’s part of an effort by agricultural powerhouse Brazil to lead the way to a dramatic modernization of cocoa production methods, helping to spur an industry revival in the country. More broadly, the shift may bring much-needed assistance to global markets facing severe bean shortages from top growers in West Africa.
Cocoa prices have more than doubled this year to a record as extreme weather, disease and structural issues have hurt supplies from Ivory Coast and Ghana. Cocoa futures in New York settled at $9,312 per ton on Friday, climbing roughly 3%. Low pay has hampered farmers’ ability to invest in improvements, limiting how much cocoa their trees can yield. That’s bringing more global attention to Brazil, which has plenty of agricultural know-how and farmers with financial resources to invest in new crops.
“The production model in Africa tends to run out of steam over time, and that creates possibilities for other regions,” said Laerte Moraes, a managing director for Cargill Inc.’s South American food ingredients unit. “Brazil has all the conditions to be a very efficient and effective cocoa producer.”
The giant trading company is among the groups working with new technology to grow cocoa in atypical areas in Brazil. After a recent agreement with farmers from the savanna region of Cerrado, Cargill is now in talks with chocolate makers, looking to build partnerships with farmers for a next phase in cocoa investments.
Brazil produces less than 5% of global cocoa supplies, and is currently a net importer of beans. Once a prominent global supplier, the South American nation lost it all to a tree-killing disease known as witches’ broom that decimated crops in the 1980s.
Brazil, where the main television channel is updating an 1990s telenovela about cocoa farmers, is set on a revival. The country’s cocoa commission Ceplac is seeking to roughly double output to more than 440,000 tons a year by 2030. While still far from top supplier Ivory Coast, that would turn Brazil into one of the top producing countries, likely surpassing Nigeria and Cameroon.
Previously, Brazil used production methods that confined cocoa to a few small, more humid areas under the shadows of taller native trees. Now, the new machines can operate under bright sunlight and on plain land slots.
Combined with better irrigation and large use of fertilizer and pesticides, as well as the selection of tree seedlings that can resist exposure to sunlight, producers are betting they can make cocoa crops more productive, and more resistant to disease and extreme weather.
Several farmers working with the new techniques say productivity can reach about 3,000 kilograms per hectare, much higher than the national average of 491 kilograms per hectare.
Widespread irrigation is allowing cocoa planting in dryer areas — similar to an expansion with soybeans and corn in the same regions that helped Brazil become a major exporter of those commodities.
“A lot of people who are new to the cocoa industry are starting to explore it,” said agronomist Silvino Kruschewsky Neto, who consults for several farms in the country. “They have a very well-formed business vision, and a culture that dictates the crop has to be productive and adopt technology.”
Farming group Agrícola DM4 in the southern part of Bahia state is using the train-like harvesting machine to reduce costs. On a farm that also grows black pepper and coffee, cocoa is expanding faster than initially planned as surging prices mean the crop is becoming more profitable, according to Fernando De Martins, chief executive officer of the group.
“Producers are motivated to plant even more,” De Martins said. “The cocoa price level has changed, and I don’t believe we’ll see low prices for the next couple of years.”
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Even PepsiCo Inc. is upbeat about cocoa in Brazil. The company — which uses cocoa in an instant chocolate drink that’s popular in Brazil — saw good results after trying cocoa plantations in combination with coconut trees located at some of Brazil’s driest regions.
“The vitality of cocoa plants surprises even the experts,” said Ricardo Tinoco, an agronomist at the company. Pepsi is considering expansion across 450 hectares (1,112 acres) on one farm it owns, and could also take cocoa to some farms in the region that supply it with coconut water.
Similar results were seen at Schmidt Agricola, the company that partnered with Cargill two years ago to foster new techniques for cocoa. The crop development has been encouraging, with an “abnormal” amount of fruit already developing in the trees, Cargill’s Moraes said.
While it will take time before some of the more recently planted areas start bearing fruit, the new farming methods are starting to get the world’s attention as global markets seek alternative cocoa suppliers.
“Brazil has turned into the talk of the town,” De Martins said.
(Updates with Friday’s cocoa price in fourth paragraph. An earlier version corrected the location of the farm in the 14th paragraph.)
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