you go to africa because you were talking about africa before the reality is extremely complex like at every level meaning a producer to give you an example the same producer that i was telling you is like i would love to tell you cacao and i am very happy to buy cacao to the producer but for me to buy cacao to this producer it means that we're gonna pass for 10 persons so i cannot give the money to this person because we need to he need to give the cacao to the coyote and the coyote already trick his balance his scale sorry and then the comparative is already another relationship with this person and then the truck bringing the cacao to the warehouse and then in the warehouse and you lose the fate sometimes on june 9 and 10 this year our live online workshop biochar for farming is happening in english and spanish with returning specialist professors angela barrero and morillo gettarello tickets are ten dollars for farmers and one hundred dollars for everybody else which includes nine pay it forward tickets for farmers who can't pay the ticket price head to mapperforward.coffee forward slash workshops or check the show notes for links welcome to the daily coffee pro by mapper forward friends i'm your host liya safar and this is episode two of a five-part series with cesar magaña from belco the director of cacao at belco we're talking about the cacao industry in 2025 and all the volatility that's coming with it there are a lot of parallels uh between what's going on in cacao and what's going on in coffee in the last episode we talked about where the volatility is coming from in cacao and i'm starting to get the feeling cesar that the volatility that's happening in cacao and the ambiguity around that people have a lot of stories that they're telling in the press and on bloomberg and all of these kinds of things the same way that they're saying with coffee yeah but at the end of the day we really don't know and that's that was kind of what i talked from the last episode am i correct there what i'm sure is that we are repeating what we are reading again and again and sometimes it's like you ask ei you know like uh okay tell me why we have a volatility in cacao and ei gives you the answer and the answer is there and then you open the tv is there and you open your computer is there right so we keep perpetuating it okay then i have a question because in this episode we're going to talk about the humans involved in the production of cacao but before we talk about the humans i want to ask you one of the stories that has been constantly told and is like hot on bloomberg particularly right now is this story about the mites that infested the cacao farms all over the ivory coast and destroyed the cacao trees do you know if that's true i mean for sure for sure it's it's but it's not the only reason i mean this is the consequence again of something that we didn't do you know like why the coffee rust is so important in coffee for coffee people because we have too many plants of coffee who are susceptibles in everywhere is the same so of course you get one plant with a little thing and everything is going to be there and in cacao if you have weak plants and you have not protected plants from the song and you have not protected and you don't have the season the environment that the cacao needs and you don't put the attention to produce cacao with other products i mean in the moment that you only produce cacao first of all your level of risk is so high because like any other product you depend of seasons you depend on the same client you depend on so many factors that put your risk and i know it's very easy to say and very hard to do especially when you work the land but agriculture as we know it right now is super risky because we are focusing i produce cacao so i'm a specialist in cacao and remember high quality cacao is a product that is not only produced it's also transformed a lot of the time for the producer so we are asking to the producer to be economist to be agronomy scientist scientist to be guru to be everything you know and it's just not possible and at the same time we are pushing to we need more cacao so you need to produce more cacao and that means the way that cacao is produced today it just puts the production sector in a very high risk meaning that if you then you're coming back to africa because this is the place that everybody's talking about meats or virus or fungus or plants who are unhealthy and everything together it does a bump that yes of course there is less cacao produced and but all of the reason why the cacao is produced there's no one reason you can point okay that's the reason you know the reason is people planting cacao they don't even know sometimes how the cacao is being used they don't have any particular attachment to this fruit that is not the money that they get paid in the end of the day after their recollection not the motivation to produce cacao is not always there and when you are as a human being non-motivated for something it's even weaker you know it's all the strength that can give you like okay but this doesn't work i move to another thing you're not thinking like that just a year ago people were getting paid two thousand dollars per ton that's what we know so that's not even real because the two thousand dollars ton is the price that we know that the market is saying but you need to move that cacao you need to drive that cacao you need to warehouse that cacao then the two thousand it's maybe you are losing money for sure and maybe we are still losing losing less you know so the way that the production area is being treated it's just not there at all so that's the base of the way that we are working right now we are working with a big amount of cacao producers in the world that they don't really know what they are doing and that's quite a mission for us to i would not say to change but to be part of the change you know like we need to be focused and like when a person understand what they're doing there's big chances of the things are going to change so this thing that cacao right now is not enough or we lose a lot of the crop last year okay there's less cacao and the consume is going up yes a reality and there is less cacao because there is because there is fungus because there is dry because there's too much rain because there is me everything is true and it's been there for years and years and years and the crisis arrived as a consequence of we never put attention in there's many people who've been saying hey guys that's gonna happen you know there's people saying it and experts saying hey that's gonna happen to you like people is not doing anything just okay it's gonna happen you know okay so now happened and i the crazy thing is like can be worse we cannot say like okay that was the peak of how many euros and that was the worst we don't know because it's also not real there's a lot of speculation for many powers and sectors in the middle of the situation and speculation for me as far understanding something that is not real when you speculate it's a ghost you know it's like okay so even when you now we're talking about news that you read or things that you hear and then in the last month for example the big news like big companies they're gonna stop using cacao in the formula and right now they use less cacao you don't know if it's the real news and it's for real business for that company or the news somebody behind you make it bigger because that could put the cacao down for a couple of minutes and in that two minutes somebody's gonna click and make money so for people who don't understand that the same thing's happening in coffee right you guys may see that there are consultants out there and there are journalists out there that put out reports and they say you know the production and the yield in brazil is expected to go down in the next harvest and you know it's like nine months away so how the fuck can anybody know what's actually going to happen in nine months from now but all of that there are times and it is you know we all know that this happens those reports are paid for and they are paid for to facilitate specific trades done by speculators so what will happen there is that as that report comes down if you watch the commodities market the futures market you will see that right before that the price was low people bought when the price was low this report comes out and the price spikes and so then they sell their contracts and they've made millions maybe billions in the process of doing that that's the kind of market manipulation that you see in coffee and you see in cacao and this is why when we were saying in the last episode about price stability right it would be great for producers if there wasn't this fuckery taking place and there was double pricing but it doesn't work for other people and so when we talk about like who are the humans involved in the production of cacao that's the actual cacao supply chain we have a cacao supply chain we have a coffee supply chain but there is a shadow industry and we talked about it on this podcast a couple of times there's a whole shadow cacao industry and coffee industry that benefits so much in it's a kind of a symbiotic parasitic relationship that exists between the actual supply chain and the shadow supply chain they need the cacao supply chain to exist so that they have a toy to play with they have a way a vessel a mechanism to make their billions of dollars but they just feed the producers their scraps and make sure that they keep enabling the existence of this market yeah these are the people who are not actually involved in the production of cacao but they are the people who benefit yeah i mean you can make business from cacao without to don't understand anything like you know it's a ghost that you are dealing with something that doesn't yeah you're putting money you're betting with something that doesn't exist and you don't really care about cacao who is producing who is using it you are just interested in the game i'm not expert in that but i know that exists and sadly i know that exists because it becomes really important right now and every it was always important actually like you cannot work in cacao and assume that the market doesn't exist because everybody is impacted and i can tell you the example of a producer in colombia for example like uh this person has been producing cacao for 10 years or 20 years and every time that this person produced cacao you he get like one dollar you know per kilo to give you an idea of something realistic uh five years ago so this person is just one dollar one dollar one dollar right so i love specialty cacao so for me please uh you bring in special bags you drive in special way you ferment in a special way and please avoid the insect because it's insect and the whole thing is that beautiful work and i can pay you two dollars to give you an example so i pay twice then i become really interesting for this person because i'm the buyer no i'm getting there to buy cacao and i put value on the thing so that's especially cacao in a very simplistic way this is we're going to explore specialty cacao in the next episode at depth so people can i am deliberately stopping you there so that we don't go into that but but what i want to ask you about that you just mentioned something just keep my point and don't leave it like that it's like what happened with this ghost market with the speculation right with the with this dryness in africa when this virus or with these insects or with these fungus and then like nothing changed you know it's from one day to another the price of the cacao goes like boom boom boom boom boom the producer tomorrow he can sell his cacao for eight dollars you know so we're not talking about especially cacao but quality is the first thing or one of the first things actually suffer who cares about making quality i'm gonna get paid eight all right so me as an actor and now i'm talking about my life my routine daily life that we are trying to build this something very structured and fair and the whole beautiful story i need to understand what's happening in the market you know and sometimes and a lot of the times it's very hard to explain because the the minds playing with these things are not you know in our face or maybe are they're too in our face i don't know but they're not in our face but because there's no logic you know this jungle price is not logic the part that fucks with me is i don't know when we're being manipulated now and when we're not i don't know when producers are being manipulated and when they're not i don't know what is real and what isn't real i mean okay we could have a philosophical conversation about how that's happening with everything in the world right now but if we keep it about cacao and we keep it about coffee these two things are running in tandem where everybody that is involved in the production of cacao is confused they can like what is the real story of what's going on yeah and i wonder you know i was thinking at the end while you were talking in the last episode i wonder if people who are involved in the production of cacao are starting to ask questions that the generations before them did not ask and that's leading to a shift in the volatility of different things now i know that you said you know uh the people who are growing cacao information and knowledge is uh something that's difficult to get access to but having said that farmers are amongst the smartest people i've ever met yeah definitely right and and i think that farming worked really well when farmers thought that they were creating food for the world and that they were feeding people and now i think farmers realize they're getting fucked with and i don't think that farmers are okay with that no but you know then it's very interesting i can give you an example of a farmer i met this guy and he's like you know like i produce cacao but when i sell my cacao the money that i get is not enough to survive so then the question is like how much money you need to survive then is that this knowledge is super rich because it means like this person understand how much it can produce and what are the possibilities for for his family or her family to survive with this amount of cacao so that's a base in what we can trust and that you know of course it's not solid and it can have like more can be more expensive or rent your house however the movement of your economy let's say is more solid than just to say cacao at this price or this price so this person is telling me me to live my life i need five dollars per kilo i'm just telling you remember so from there we can negotiate right because quality because this and because that but until now the producers are very conscious that they are producing something and not making money up no right but the system it's so broken that we are educated when we buy something we are educated to buy something with the best advantage we can have meaning quality meaning size meaning volume meaning whatever at the cheapest price we are educated for that like the society is educated for that so meaning you cannot ask a multinational to be fair with the price of the cacao we are paying to who you know like and then when you go to africa because you were talking about africa before the reality is extremely complex like at every level meaning that producer to give you an example the same producer that i was telling you is like i would love to tell you cacao and i am very happy to buy cacao to the producer but for me to buy cacao to this producer it means that we're gonna pass for 10 persons so i cannot give the money to this person because we need to he need to give the cacao to the coyote and the coyote already trick his balance his scale sorry and then the comparative is already another relationship with this person and then the truck bringing the cacao to the warehouse and then in the warehouse and you lose the fate sometimes in that and that's that's all the people that are involved in it like it's not just the farmer that's involved in creating the cacao and everybody seems to want, they think that they're adding value, and they deserve a little bit extra, and it seems like everyone's getting paid for a little bit extra that they add to the value, but the producer's not getting, it doesn't exist without the producer. Nobody else gets paid if the producer doesn't create this thing. Yeah, exactly. I mean, you know, like when you rent a container, when you're going to export cacao in a normal boat, you bring cacao in a container.
These big companies, these are massive companies, multinationals, who own a container, right? And these companies, they know what is their cost for the container, to put a container, to close the container and to put it in the port, and the boat who export the cacao, it knows what is the cost for moving this thing. And making money, the other company, making money, we as an importers, we understand how much money we put when we buy cacao, and we resell cacao, because our system is very complex, but we understand where is our money going. A lot of the producers, they understand also, but they are not capable to make money.
It's very interesting. So again, it's pretty weak. The game is rigged. The game is rigged.
Again, I go back to the parasite, right? We keep the producer alive enough so that he keeps making the cacao, but everybody else is the ones that are really winning from this situation. It's the shadow industry. Yeah, and it's not fair, and it's very hard.
It's very hard for everybody in the value chain making it for real, you know, playing the game in a high level and making it for real, or, you are not making it. You're not playing the game. You know, you are just like making money, and making money is not sustainable. You know, it's gonna happen, but for real, meaning that today's cacao, tomorrow is going to be beans, and the next day is going to be plastic.
So it's not, it's going to keep in the time. If you're making it at a high level, you want to be there in the time. Maybe not you as a person, but the system, you know, you want a system that works for everybody in the value chain. So when you're in the value chain, you know when something is not working good.
Not right. Yeah. And you know, you know, you know, like, you know, maybe you don't have the exact numbers, but you know that the chocolate maker or self, the farmer, the truck, the container, somebody, it's not, somebody's not necessary, maybe in that chain. That's beautiful when we can cook things like that.
Yeah. But also there's, there's like, you look at what's going on in Ghana, and we'll talk about that in a future episode, but you look at what's going on in Ghana and how the prices are at the rules from before that restricted the price that you could sell cacao at and how that hasn't been adjusted now that the price has skyrocketed to what it is. The Ghanaian farmers are not benefiting from this. And there's some fuckery that's allegedly going on there.
And it's going to wrap this episode up. And in the next episode, we're going to talk about what specialty cacao is. So join us for that episode, folks. Peace out on peanut butter.
Have an amazing rest of your day. I really hope you enjoyed this episode, friends. Please don't forget to show us some love by subscribing, liking, commenting, and most of all, sharing this podcast with your friends. Check the show notes for links, including our sponsors and our Patreon, and stay tuned for more great conversations on the Daily Coffee Pro by Mapper Forward.