Cocoa prices up on Ivory Coast unrest

Kochi: Chocolates may not come easy on the pocket as cocoa prices surge ahead in the domestic market due to global supply constraints.

India imports more than half of its requirement of cocoa every year with demand increasing at a rate of 8% per annum. “With supply from Ivory Coast disrupted due to political problems, availability is low in most of the markets,” traders said.

Indian cocoa prices are now at a premium of more than 12-15% compared to the global markets. Dry beans at the farm gate are above R175 per kg while wet beans are selling at around R55 per kg in Kerala. “There is a scramble for cocoa and the supply is tight. Farmers are getting good returns for their crop,” Shiny George of Indian Organic Farmers Company.

Ivory Coast produces nearly 40% of the world's raw cocoa, valued at about $3.8 billion. Interestingly, the wholesale price of cocoa has been surging ahead and doubled in the previous four years as global demand increased, particularly in India and China.

Indian farmers had a disappointing start with cocoa in the 80s.Low productivity of cocoa in India and handful of buyers resulted in the farmers getting a raw deal, which eventually led to the neglect of the crop. Cocoa prices started moving up with the development of the Indian chocolate industry and entry of more players. The Indian chocolate market is worth R1,500 crore and offers great potential for Western chocolate manufacturers as the market is still in its early stages. India imports more than 20,000 tonne of cocoa products, which include beans, paste butter and chocolate preparations.

Currently, cocoa has been planted in 46,000 ha in India. Of which 16,000 hectares is in Andhra Pradesh followed by Kerala with 11,000 ha. According to Kochi-based Directorate of Cashew and Cocoa Development (DACCD), cocoa production in 2010-11 is likely to remain same or fall marginally from 12,900 tonne produced in 2009-10 due to rain-related damages to the existing crop.

(Source: http://www.financialexpress.com/news/cocoa-prices-up-on-ivory-coast-unrest/783672/0)