Favorable market conditions seen as sweet boost for cacao industry

The Philippine cacao industry may be entering a period of expansion and increased competitiveness, according to a policy brief by the University of Asia and the Pacific-Center for Food and Agri Business (UA&P-CFA). This positive outlook is attributed to favorable market conditions, including rising farmgate prices and growing international recognition.

Farmgate prices for cacao have seen a significant increase from P92 per kilo in 2021 to P243 per kilo in 2025. This price rise is a result of supply disruptions from major cocoa-producing countries, creating better opportunities for Philippine cacao producers. Despite this growth, the industry continues to face a supply-demand gap, which could be addressed by increasing production among local cacao farms.

Current productivity levels are a major concern, with local farms only producing 0.5 to 1 kilo of dried cacao beans per tree per year, well below the industry-set target of two kilos per tree per year. This low productivity limits farmers' income and hinders the industry's ability to meet domestic and export demand. Despite these challenges, the Davao Region, known as the "Cacao Capital of the Philippines," accounts for 68.7 percent of the national output, thanks to its favorable climate and adequate rainfall. Other major producing areas include Calabarzon, Zamboanga Peninsula, and Soccsksargen.

Major industry players include Kennemer Foods International Inc., Malagos Agri-Ventures Corp., Kablon Farms, and several regional cacao growers' associations. Several of these entities have earned international recognition, highlighting the growing reputation of Philippine-made chocolate for its quality and potential expansion in global markets.

However, the industry still faces challenges such as high input costs, climate risks, pests, limited post-harvest facilities, and a lack of domestic value-adding and processing capacity.

Notably, the Philippines remains a substantial importer of processed cocoa products, including cocoa powder and chocolate, despite exporting cacao beans. Cacao exports have improved from 2021 to 2025, reaching $46.23 million with a total volume of 5,930 metric tons. However, import value has grown by 69.8 percent during the same period, amounting to $2.14 million and 281 metric tons.

This substantial gap between imports and exports suggests strong domestic demand and presents an opportunity for the industry to expand local processing and reduce reliance on imported cocoa products.