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Falling cocoa prices hurt Colombia’s war on cocaine

Scott Tong Aug 16, 2012

Falling cocoa prices hurt Colombia’s war on cocaine

Scott Tong Aug 16, 2012

Kai Ryssdal: I get, every now and then, a hankerin’ for chocolate. Browse the candy aisle closely, and you’ll see it’s gotten cheaper lately. In part because the price of the raw ingredient — cocoa — is off 25 percent this past year.

Good for those of us with a sweet tooth. Not so good for cocoa growers. That includes farmers in Colombia trying to get out of a different business: Cocaine.

From Washington, Marketplace’s Scott Tong reports.

Scott Tong: With U.S. help, Colombia’s tried for decades to get farmers to grow, well anything but the cocaine plant. Like cocoa beans. Has it worked?

Aurelio Suarez Montoya: No. The producers, they are not satisfied with the substitution.

Aurelio Suarez Montoya heads a coalition of farmers in Colombia. I reached him in Bogota. He says with prices low, they lose money on cocoa, or cacao as he calls it. And are tempted to return to the illicit plant for cocaine, coca.

Suarez Montoya: Many farmers told me if the cacao production is down, they could be returning to the coca production.

And the economics for illegal coca are good. There are four harvests a year. Demand is good. And it’s way more convenient than cocoa beans, says Mark Schneider of the International Crisis Group.

Mark Schneider: It’s a lot harder to carry a bulky quantity of cocoa to market, versus the small amount that gives you equal amount of profit of coca.

It’s also hard to break into a sophisticated global cocoa market.

This year, big producers in West Africa have flooded the market. And consumers are buying less of the end product: chocolate, says Jon Cox of Kepler Capital Markets in Zurich.

Jon Cox: In a sort of recessionary environment, people are buying less chocolate bars. You know, potentially still buying chocolate, but it tends to be a bit more high end, and so the volumes haven’t been quite so good as usual.

By all accounts, Colombia’s road away from cocaine will be long. And it may not involve other crops.

One attempted solution: to get farmers factory jobs — making lingerie.

I’m Scott Tong for Marketplace.

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