Quarterly Progress Report: January- March 2020

However, the second quarter of Fiscal Year 2020 has brought new challenges to the Alliance due to the COVID-19 global pandemic. The international price of cacao was higher than it was for the same period in 2019, but in March, cacao prices trended downward on the New York Stock Exchange (NYSE), reaching levels lower than USD 2,200 MT. According to the International Cocoa Organization (ICCO), this was due to greater levels of cacao production and processing reported in Africa. The large cacao harvest period in the regions where the Alliance intervenes begins at the end of April, but the Government of Peru declared a State of Health Emergency (DS 044-2020), which mandated 15 days of social isolation. This lockdown has stopped most economic activity across Peru, but there are exceptions in the agricultural sector for transport. Misunderstanding of the exception among local authorities created some challenges initially, resulting in confusion regarding how collection would take place during the harvest. Through the intervention of APPCACAO, private marketing and processing companies that are PCA members, and the Peruvian government, the situation is now being resolved with clarification from the Government of Peru. Exporting companies have ensured the demand of the product remains strong, having confirmed contracts with their clients in Europe, the U.S, and Asia for this year. In fact, in some cases, buyers have requested shipments earlier than planned, which has generated confidence among actors in the sector. The PCA technical field staff has been assessing the demonstration plots, conducting technical visits, group trainings, field days, and "CACAOTECH" technological fairs to meet Year 4 PCA goals for technical assistance. However, the shutdown of activities, imposed by the government, has led to many farmers abiding the social isolation in their parcels, and various communities deciding to isolate themselves. The PCA has facilitated market access for its members, with 31 current cacao buyers, including 13 international and 18 domestic buyers. The volume of cacao sold by PCA member organizations for the January-March 2020 quarter was 1,985 MT, of which 1,656 MT are organic and 328 MT are conventional. The average premium over the NYSE cacao price was $443, and the average price for organic cacao beans was $2,650/MT. However, adverse climactic conditions at the micro-climate level in some corridors have enabled the proliferation of disease, such as Black Pod, and limited organizational capacity and limited supply capital in emerging organizations have also affected the Alliance's performance. To address these limitations, the PCA has intensified the implementation of best practices in integrated nutrition for better nourished plants that are less vulnerable to pests and disease, as well as the implementation of Integrated Pest Management (IPM). The Alliance has also promoted environmental best practices during harvest and trained managers and boards of directors of organizations on key aspects of cacao sales. Additionally, the PCA has developed an action plan in light of current restrictions to carry out cacao from farmers in coordination with APPCACAO and developed safety protocols so that field technicians can conduct their jobs without risking their or producers' health.