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Risk assessment (SPA) / Evaluación Riesgos
Development of the assessment
This risk assessment has been developed in the context of the global project "Sustainable Agriculture for Forest Ecosystems (SAFE)" and the implementation of the global program "AgriChains" led by the German Technical Cooperation (GIZ) Ecuador. It is part of a series of activities focussing on the socialization of EUDR and its implications for the cocoa chain, but also on strengthening local capacities that facilitate adaptation to the requirements of EUDR.
Taking into account the requirements specified in the EUDR (legality and non-deforestation), Preferred by Nature organized a team of international experts with proven experience in certification systems, supply chains, and risk assessments to conduct the risk assessment. They worked with the support of a group of local technicians. The risk assessment was developed considering Ecuador's legislative framework and current practices.
Preferred by Nature carried out the risk assessment and analysis based on collected and analyzed information, a review of applicable legal regulations, and consultation workshops with state entities, producers, leaders and directors and administrative staff of associations, representatives of cooperative entities, and local entities that provide advice and/or direct assistance. Field visits were also conducted to farms and primary and secondary collection centers to validate information and understand the functioning of the supply chain.
To organize the risk analysis, Preferred by Nature generated a list of indicators linked to the EUDR requirements related to deforestation and legal compliance. Based on this list of indicators, the risk assessment was organized and documented.
Overview of Ecuador and Its Cocoa Sector
Geography & Governance
Ecuador is a geographically diverse South American country with four main regions: Coast, Highlands, Amazon, and Galápagos. It operates as a democratic republic with a legal framework that supports citizen and environmental rights, though challenges like corruption persist.
Land Management & Indigenous Communities
Land use is complex, involving indigenous groups, small farmers, and large agribusinesses. Indigenous peoples have constitutional rights, including prior consultation, but implementation is inconsistent. Deforestation remains a major issue due to agriculture and resource extraction.
Agricultural Importance
Ecuador is a major agricultural producer, with key exports including bananas, coffee, flowers, and especially cocoa, which plays a central role in the economy.
Historical Background
Cocoa has been cultivated since pre-Columbian times and was used in rituals and as currency. Ecuador became a major exporter between 1890 and 1930, known for its fine aroma cocoa. However, diseases like moniliasis and witch’s broom caused production declines.
Modern Developments
The introduction of the CCN-51 variety improved yields and resistance. As of 2024, cocoa is grown on over 636,000 hectares, mainly in coastal provinces. Ecuador remains the leading exporter of fine aroma cocoa in the Americas.
Current Status
In early 2024, exports reached 101,000 tons, a 30% increase from the previous year, valued at USD 510.8 million. Prices peaked at USD 11,499 per ton. Despite growth, small producers face challenges like low productivity, disease, and limited access to technology.
Key Actors:
Producers
Intermediaries & Collectors
Processors
Exporters