Peru Cacao Alliance Phase II Quarterly Progress Report: Year 6 (January – March 2022)

These partnerships focused on developing pilot projects with companies such as Abonos Vivos, Netafim, and 4Told Fintech. The work conducted in the target regions consisted of group training and technical visits to promote integrated nutrition and timely pruning, integrated pest management, and good environmental practices. These practices are becoming increasingly necessary to combat the effects of climatic variations in rainfall and temperatures on cacao production. In addition to detrimental environmental factors, other factors outside of the producer's control, including increases in the price of fertilizers, new European Union regulations on organic certification, and high demand for shipping containers, are causing delays in the issuance of permits and the exportation of cacao. To address these situations, PCA has been working together with the Coffee and Cacao Committee of the Peruvian Exporters Association and the Cacao Producers Association to prepare proposals to the government that will help solve the problems in the field and speed up export processes. PCA has become a facilitator between the different actors within the cacao market system by promoting the coordination of joint programs and the development of initiatives to ensure supply chain sustainability. In the second quarter of Year 6, PCA facilitated market access for its member organizations by facilitating purchase agreements with 37 end buyers, including ICAM, PRONATEC AG, and Compañía Nacional de Chocolate. A total of 2,266.08 MT of cacao was sold by PCA member organizations from January to March 2022, of which 1,636.72 MT were organic and 629.36 MT were conventionally grown. The average premium over the NYSE cacao price was $530, and the average price for organic cacao beans was $2,746.38/MT. However, the cacao collection was 52.74% of projected levels due to the effects of climate change, which resulted in delays in several areas. Additionally, the presence of chemicals in cacao beans and the container crisis are causing delays in shipments and exports. PCA is working to address these limitations by supporting SENASA to coordinate the various actors in the supply chain to develop a strategy for reducing delays in the delivery of pesticide analysis results. PCA is also promoting alternatives to pesticides that are currently permitted in Peru, in order to reduce the risk of contamination and regain the confidence of end buyers. Furthermore, PCA is continuing to promote the use of integrated pest management (IPM) including cultural, physical, mechanical, and biological control methods to reduce pesticide use. In terms of increasing cacao farmers' productivity and post-harvest quality, PCA trained a total of 619 households in the consolidation zones during this quarter. The training focused on developing and implementing a methodology for the widespread adoption of new technological packages for agroforestry systems (AFS) among smallholder farmers.