COPAL COCOA Info



COPAL COCOA Info

A Weekly Newsletter of Cocoa Producers' Alliance

| Health and Nutrition |Business & Economy |

|Is dark chocolate good for you? |Barry Callebaut AG: Increasing capacity to sustain growth in the |

| |Gourmet & Specialties Products business |

|Production and Quality |COTE D'IVOIRE: Cocoa farmers hope reforms will pay off |

|FG targets 500,000 tonnes of cocoa by 2015 | |

|Nigeria seeks to develop its Cocoa Market, Association Says |Labour Issues |

| | |

|The Market | |

|West Africa, Europe may ship Cocoa Beans to U.S. on higher price |Environmental Issue |

|I.Coast cocoa arrivals seen 235,000 T by Nov 20 | |

|Cocoa Prices lose their sweetness | |

|Chocolate Binge topping $100 billion boosts Cocoa after slump: |Research & Development |

|Commodities |Ivory Coast to replant Cocoa Trees with Faster-Growing variety |

|Ivorian cocoa prices fall on oversupply-farmers | |

|Ivory Coast seeks chocolate fairness for farmers |Promotion & Consumption |

|Cocoa may advance as much as 13% on Demand, Macquarie Says |Ghana to receive second part of Loan for Cocoa Purchases |

| | |

|Processing & Manufacturing |Others |

|Swiss Cocoa Firm joins with local operator for New Plant in Makassar |Duffour worried about uncertified cocoa beans |

| |Cocoa on the boil? |

In the News (from Newspapers worldwide)

ICCO Daily Cocoa Prices

| |ICCO Daily Price |ICCO Daily price |London futures |New York futures |

| |(SDR/tonne) |($US/tonne) |(£/tonne) |($US/tonne) |

| | | | | |

|21st November |1556.93 |2428.87 |1556.33 |2425.67 |

| | | | | |

|22nd November |1551.67 |2427.42 |1554.33 |2425.33 |

| | | | | |

|23rd November |1550.43 |2412.80 |1558.67 |2412.00 |

| | | | | |

|24th November |0 |0 |1560.33 |0 |

| | | | | |

|25h November |1539.21 |2395.34 |1551.67 |2394.67 |

| | | | | |

|Average |1240.00 |1933.00 |1933.00 |1556.00 |

International Financial Futures and Options Exchange (LIFFE)

London Futures Market – Summary of Trading Activities

(£ per tone)

|Monday |21st November |2011 |  |  |  |  |

|Month |Opening Trans |Settle |Change |Daily High |Daily Low |Volume |

|Dec  2011 |1533 |1514 |-23 |1534S |1510 |2,811 |

|Mar  2012 |1561 |1541 |-24 |1562S |1536 |6,964 |

|May  2012 |1578 |1557 |-24 |1578S |1552 |1,337 |

|Jul  2012 |1593 |1571 |-25 |1593S |1568S |451 |

|Sep  2012 |1603 |1582 |-24 |1603S |1579S |810 |

|Dec  2012 |1617 |1591 |-32 |1617S |1591S |311 |

|Mar  2013 |1635 |1602 |-33 |1635 |1604 |1,073 |

|May  2013 |  |1610 |-34 |  |  |0 |

|Jul  2013 |  |1600 |-34 |  |  |0 |

|Sep  2013 |  |1600 |-34 |  |  |0 |

|Average/Totals |  |1577 |  |  |  |13,757 |

|Tuesday |22nd November |2011 |  |  |  |  |

|Month |Opening Trans |Settle |Change |Daily High |Daily Low |Volume |

|Dec  2011 |1516 |1510 |-4 |1541S |1496 |2,687 |

|Mar  2012 |1540 |1540 |-1 |1572 |1525 |9,163 |

|May  2012 |1555 |1554 |-3 |1587 |1541S |1,467 |

|Jul  2012 |1569 |1569 |-2 |1599 |1557S |324 |

|Sep  2012 |1580 |1579 |-3 |1606 |1566S |225 |

|Dec  2012 |1588 |1593 |2 |1611S |1580 |99 |

|Mar  2013 |1601 |1608 |6 |1626S |1591S |620 |

|May  2013 |  |1618 |8 |  |  |0 |

|Jul  2013 |  |1623 |23 |  |  |0 |

|Sep  2013 |  |1590 |-10 |  |  |0 |

|Average/Totals |  |1844 |  |  |  |14,585 |

|Wednesday |23rd November |2011 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|Dec  2011 |1509 |1516 |6 |1529S |1508 |1,884 |

|Mar  2012 |1545 |1544 |4 |1560 |1536 |4,610 |

|May  2012 |1559 |1558 |4 |1572S |1551S |389 |

|Jul  2012 |1569 |1574 |5 |1578S |1567S |257 |

|Sep  2012 |1579 |1585 |6 |1592S |1578S |387 |

|Dec  2012 |1591 |1596 |3 |1602S |1591S |300 |

|Mar  2013 |1604 |1611 |3 |1617S |1604S |120 |

|May  2013 |  |1619 |1 |  |  |0 |

|Jul  2013 |  |1621 |-2 |  |  |0 |

|Sep  2013 |1631 |1629 |39 |1631S |1631S |500 |

|Average/Totals |  |1585 |  |  |  |8,447 |

|Thursday |24th November |2011 |  |  |  |  |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|Dec  2011 |1516 |1518 |2 |1523 |1510S |1,394 |

|Mar  2012 |1541 |1545 |1 |1555 |1538 |2,275 |

|May  2012 |1564 |1560 |2 |1566 |1555S |798 |

|Jul  2012 |1573 |1576 |2 |1578S |1571S |355 |

|Sep  2012 |1585 |1587 |2 |1594S |1582S |293 |

|Dec  2012 |1596 |1599 |3 |1602S |1594S |129 |

|Mar  2013 |  |1609 |-2 |  |  |0 |

|May  2013 |1617 |1617 |-2 |1625S |1617S |9 |

|Jul  2013 |  |1619 |-2 |  |  |0 |

|Sep  2013 |  |1627 |-2 |  |  |0 |

|Average/Totals |  |1586 |  |  |  |5,253 |

|Month |Opening Trans |Settle |Change |High |Low |Volume |

|Dec  2011 |1518 |1509 |-9 |1518S |1504S |1,658 |

|Mar  2012 |1545 |1536 |-9 |1546 |1530 |4,787 |

|May  2012 |1558 |1551 |-9 |1558 |1545 |1,609 |

|Jul  2012 |1573 |1568 |-8 |1573S |1562S |645 |

|Sep  2012 |1585 |1578 |-9 |1585 |1572S |404 |

|Dec  2012 |1594 |1590 |-9 |1594S |1582S |255 |

|Mar  2013 |1607 |1602 |-7 |1607S |1592 |339 |

|May  2013 |1617 |1610 |-7 |1617S |1606S |22 |

|Jul  2013 |  |1603 |-16 |  |  |0 |

|Sep  2013 |  |1611 |-16 |  |  |0 |

|Average/Totals |  |1576 |  |  |  |

|  |  |  |  |  |51,761 |

New York Board of Trade

(New York Futures Market – Summary of Trading Activities)

(US$ per tone)

|Monday |21st November |2011 |  |  |  |  |

|Month |Open |Price |Change |High |Low |Volume |

|Dec  2011 |2295 |2264 |-44 |2295 |2240 |24 |

|Mar  2012 |2440 |2414 |-44 |2440 |2403 |8,743 |

|May  2012 |2441 |2420 |-44 |2441 |2412 |1,896 |

|Jul  2012 |2443 |2431 |-48 |2447 |2428 |537 |

|Sep  2012 |2469 |2438 |-53 |2469 |2438 |201 |

|Dec  2012 |2485 |2454 |-53 |2485 |2460 |159 |

|Mar  2013 |2513 |2468 |-53 |2513 |2474 |64 |

|May  2013 |0 |2480 |-54 |0 |0 |2 |

|Jul  2013 |0 |2492 |-51 |0 |0 |6 |

|Sep  2013 |2560 |2517 |-53 |2560 |2560 |41 |

|Average/Totals |  |2438 |  |  |  |11673 |

|Tuesday |22nd November |2011 |  |  |  |  |

|Month |Open |Price |Change |High |Low |Volume |

|Dec  2011 |2278 |2250 |-14 |2314 |2278 |22 |

|Mar  2012 |2418 |2421 |7 |2466 |2395 |13,926 |

|May  2012 |2427 |2429 |9 |2474 |2403 |2,326 |

|Jul  2012 |2438 |2443 |12 |2485 |2414 |1,496 |

|Sep  2012 |2447 |2451 |13 |2492 |2425 |254 |

|Dec  2012 |2463 |2464 |10 |2500 |2442 |76 |

|Mar  2013 |2480 |2476 |8 |2494 |2479 |70 |

|May  2013 |2491 |2487 |7 |2496 |2491 |5 |

|Jul  2013 |2508 |2499 |7 |2508 |2508 |2 |

|Sep  2013 |0 |2519 |2 |0 |0 |0 |

|Average/Totals |  |2444 |  |  |  |18177 |

|Wednesday |23rd November |2011 |  |  |  |  |

|Month |Open |Price |Change |High |Low |Volume |

|Dec  2011 |2250 |2246 |-4 |2260 |2250 |7 |

|Mar  2012 |2405 |2404 |-17 |2439 |2398 |7,495 |

|May  2012 |2416 |2412 |-17 |2442 |2408 |1,308 |

|Jul  2012 |2431 |2424 |-19 |2455 |2423 |423 |

|Sep  2012 |2440 |2432 |-19 |2457 |2434 |200 |

|Dec  2012 |2457 |2445 |-19 |2457 |2443 |66 |

|Mar  2013 |2473 |2460 |-16 |2473 |2458 |126 |

|May  2013 |2478 |2472 |-15 |2488 |2470 |68 |

|Jul  2013 |2493 |2489 |-10 |2501 |2484 |65 |

|Sep  2013 |0 |2509 |-10 |0 |0 |0 |

|Average/Totals |  |2429 |  |  |  |9758 |

|Thursday |24th November |2011 |  |  |  |  |

|Month |Open |Price |Change |High |Low |Volume |

|Dec  2011 |  |  |  |  |  |  |

|Mar  2012 |  |  |  |  |  |  |

|May  2012 |  |  |  |  |  |  |

|Jul  2012 |  |  |  |  |  |  |

|Sep  2012 |  |  |  |  |  |  |

|Dec  2012 |  |  |  |  |  |  |

|Mar  2013 |  |  |  |  |  |  |

|May  2013 |  |  |  |  |  |  |

|Jul  2013 |  |  |  |  |  |  |

|Sep  2013 |  |  |  |  |  |  |

|Average/Totals |  |#DIV/0! |  |  |  |0 |

|Friday |25th November |2011 |  |  |  |  |

|Month |Open |Price |Change |High |Low |Volume |

|Dec  2011 |2256 |2238 |-8 |2256 |2256 |1 |

|Mar  2012 |2406 |2381 |-23 |2411 |2378 |4,721 |

|May  2012 |2417 |2388 |-24 |2418 |2387 |502 |

|Jul  2012 |2412 |2403 |-21 |2425 |2402 |270 |

|Sep  2012 |2420 |2411 |-21 |2423 |2410 |250 |

|Dec  2012 |2436 |2424 |-21 |2436 |2424 |44 |

|Mar  2013 |2465 |2434 |-26 |2465 |2427 |261 |

|May  2013 |2465 |2446 |-26 |2465 |2465 |14 |

|Jul  2013 |0 |2461 |-28 |0 |0 |1 |

|Sep  2013 |0 |2481 |-28 |0 |0 |0 |

|Average/Totals |  |2407 |  |  |  |6064 |

|Average for the week  |2407 |  |  |  |1103 |

|  |  |  |  |  |1103 |

News

Is dark chocolate good for you?

The Hindu -

By GITA ARJUN

November 20, 2011

TASTE HEAVENLY But chocolate need not always be healthy.

With so many studies extolling the health benefits of chocolate, does it mean that we can eat chocolate with complete abandon?

Suhasini loves chocolate with a passion. She would even steal it from the mouths of babes! She is not alone in her ardour. Chocolate has been called theobroma — the food of the gods. It is the one food substance that women have a strong love-hate relationship with. Melting sensuously on the tongue, it creates the most delightful sensations, intriguingly embracing one with intense feelings of love and being loved. It is hardly surprising that chocolate has become the symbol of Valentine's Day and is the number one gift to buy for a loved one. On the other hand, women also perceive chocolate as the devil's tool, the single temptation that often makes one wander off the path of healthy food resolutions.

The production of cocoa has increased exponentially in the past few decades. According to the International Cocoa Organisation, production has risen from 1.2 million tonnes per year in 1960 to 3.2 million tonnes per year in 2004. We don't need statistics to prove to us that we are drowning in a sea of chocolate. Chocolate has gone from being a luxury food to a common confectionery, accessible to anyone.

The healthy effects of chocolate are what all of us are interested in. With so many studies coming out extolling the health benefits of chocolate on heart disease and hypertension, does it mean that we can eat chocolate with complete abandon, revelling in the food that tastes heavenly and shockingly, may actually be good for your health? Tragically, this is not true.

The good side of chocolate

Flavanoids and flavanols are plant molecules present in coloured vegetables, tea, wine and chocolate, among other food products. The flavanol epicatechin is present in cocoa and supposedly improves blood flow and helps with heart health.

Cocoa, the major ingredient of dark chocolate, contains relatively high amounts of epicatechin. White or milk chocolate lovers will be saddened to know that this type of chocolate is often devoid of flavanols, and has no health benefit.

Some studies on a relatively small number of people have shown that dark chocolate is almost as effective as drugs in decreasing high blood pressure. A recent small scientific trial showed that people who were pre-hypertensive or had early-stage hypertension could lower their blood pressure by eating small amounts of dark chocolate as part of their usual diet.

Flavanols can also decrease the risk of a heart attack by 50 per cent, coronary disease by 10 per cent, and premature death by 8 per cent. It seems that the benefits of flavanols are almost never ending. By helping the body metabolise sugars, dark chocolate may actually reduce the risk of developing diabetes. Flavanols in dark chocolate also increase HDL (“good”) cholesterol and lower LDL (“bad”) cholesterol.

In some studies, flavanols have also been shown to improve blood circulation to the brain for two to three hours after eating chocolate. So does the consumption of dark chocolate delay mental aging, improve memory and fight exhaustion?

Dark chocolate has to contain more than 60 per cent cocoa to have its beneficial effects, and is most effective when containing 75-85 per cent cocoa. How many chocolates contain that much or even taste good with those levels of cocoa?

The dark side of chocolate!

Dark chocolate can be deceptive. Many times, when we think we are eating dark chocolate, the colour is due to darkened cocoa solids; the chocolate itself does not actually contain too much cocoa. Manufacturers of chocolate remove the flavanols because they are bitter. So, unfortunately, even a dark appearing chocolate may not contain enough flavanols. Even the most health conscious among us are kept in the dark, because very rarely do manufacturers rarely label their products with information about the flavanols they contain.

It is also unfortunate that the antioxidants in chocolate are rapidly removed from the body in the normal course of events. The antioxidants, therefore, do not have enough time to show their beneficial effect on the blood vessels and the heart.

The Lancet, a leading medical journal, pointed out that “the devil in dark chocolate is the fat, sugar, and calories it also contains.” So before reaching for that piece of chocolate, remember that it contains more calories than flavonols! If you want the benefit of flavonoids and flavanols, reach for a rainbow of fruits, tea or even a glass of red wine!

FG targets 500,000 tonnes of cocoa by 2015

Daily Times Nigeria

By Chidi Okoye

November 22, 2011

The federal government plans to increase cocoa production from the present 300,000 tonnes to 500,000 tonnes by 2015, says Dr Akinwunmi Adesina, the Minister of Agriculture and Rural Development. Adesina said this on Monday in Abuja during an interactive session with the reformed Cocoa Development committee. He said that with the release of eight hybrid breed cocoa species by the Cocoa Research Institute of Nigeria (CRIN), the country could achieve the production of one million tonnes in subsequent years. He said that the government had adopted a holistic approach toward improving cocoa production which included collaborating with the 22 cocoa producing state governments.

In this regard, he said that efforts were ongoing to put in place a cocoa investment fund and create new financial instrument with the banks under the value chain system.

The minister also said that strategies had been put in place for the replacement of old cocoa trees and also to create seedlings for nurseries across the cocoa producing states for easy access to farmers. Adesina challenged the committee to work out modalities towards setting up a corporation to ensure that Nigeria’s cocoa industry was productive, efficient and competitive in the global market. He said that for easy implementation of programmes, the Central Bank of Nigeria (CBN) had included cocoa in the 450-billion-dollar Nigerian Incentive Base Risk Sharing for Agricultural Lending.

Responding, Akin Olusuyi, the President, Cocoa Processors of Nigeria, commended the efforts of government towards repositioning cocoa production under the value chain system, saying that it would enable farmers to have value for their efforts.

Nigeria seeks to develop its Cocoa Market, Association Says

Bloomberg

By Vincent Nwanma – vnwanma@

Nov 25, 2011

Nigerian farmers are joining together to earn more from the cocoa market by improving quality, the country’s cocoa association said.

“In the next two years, we are looking at achieving a 20 percent increase in output and a significant improvement in quality,” Neji Abang Neji, secretary-general of the Cocoa Association of Nigeria, said by phone yesterday from Akure, in the southwestern region of Ondo. The country’s cocoa is currently sold at a discount on the international market because of its quality.

The country is working with Socodevi, a Quebec City, Canada-based network of institutions that assist developing countries, to improve its cocoa business, said Neji, who is also Nigeria’s Socodevi coordinator.

Nigeria plans to double cocoa output to 500,000 metric tons in five years, Akinwunmi Adesina, agriculture minister, said on Nov. 11.

Nigeria ranks behind the Ivory Coast, Ghana and Indonesia as the world’s largest cocoa producer, according to the website of the International Cocoa Organization.

West Africa, Europe may ship Cocoa Beans to U.S. on higher price

BusinessWeek

By Isis Almeida

November 17, 2011

(Bloomberg) -- West African and European cocoa traders may ship more beans to the U.S. if the New York price stays above that for the beans traded in London and premiums in the U.S. physical market remain high.

Cocoa for March delivery on ICE Futures U.S. in New York cost more than beans for delivery in the same month on NYSE Liffe in London in eight of 12 trading days this month up to yesterday, data on Bloomberg show. The price in New York closed $6.29 a metric ton above London yesterday, according to the data.

“With New York trading at a premium to London, the incentive to bring cocoa to the U.S. both from West Africa and from Europe is growing,” Luis Rangel, vice president of commodity derivatives at brokerage ICAP Futures LLC in Jersey City, New Jersey, said yesterday by e-mail.

Tendering certain types of cocoa beans against the March contract on ICE is already more profitable than delivering it into the December contract on NYSE Liffe, according to London- based broker Marex Spectron Group Ltd. “The temptation to ship existing stock in Europe to the U.S.A. is growing,” Marex wrote in a report this month. “The U.S.A. is in danger of attracting far more cocoa than is required normally.”

Ivorian cocoa in Europe was at a premium of 60 pounds ($95) a ton above the December contract on NYSE Liffe yesterday, according to data on the website of the Hamburg Cocoa & Commodity Office GmbH.

In the U.S., Ivorian beans were at a premium of $180 a ton above the March contract on ICE, the most active, on Nov. 11, data from the Cocoa Merchants’ Association of America show. The association is scheduled to update prices again tomorrow.

Cocoa for December delivery slid 1.1 percent to 1,561 pounds ($2,463) a ton by 1:58 p.m. on NYSE Liffe in London. Cocoa for March delivery retreated 1.2 percent to $2,506 a ton on ICE Futures U.S. in New York.

I.Coast cocoa arrivals seen 235,000 T by Nov 20

Reuters Africa

Nov 21, 2011

ABIDJAN (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 235,000 tonnes by Nov 20, exporters estimated on Monday, compared with 331,959 tonnes in the same period of the previous season.

Exporters estimated around 45,000 tonnes of beans were delivered to the West African state's two ports between Nov 14 to 20 down from 128,0

Cocoa Prices lose their sweetness

Wall Street Journal

By Neena Rai and Michael Haddon

November 24, 2011

Cocoa prices, already down more than 35% from March highs and near three-year lows, may fall further over the coming months as part of a general wariness toward riskier assets, analysts said.

Concerns that Europe's debt crisis will deepen are likely to keep pushing investors out of assets like agricultural commodities and into perceived safe havens like the dollar and U.S. government bonds. "I think that cocoa prices still have some way to fall, and we could see average prices dip below $2,000 per metric ton during the first-quarter of 2012. Should the world enter another recession, prices could go even lower," said Edward George, soft commodities analyst at Paris-based Ecobank.

Wednesday, the front-month cocoa contract for December delivery on London's NYSE Liffe exchange edged up 0.3% to settle at £1,516. Prices have slumped 37% from March's settlement high of £2,413 ($3,757) a metric ton, hit when a violent political struggle in the Ivory Coast, the biggest producer of cocoa, the key ingredient in chocolate, brought that country's exports to a standstill.

In a sign that investors are betting on further price falls, they increased net short future positions in NYSE Liffe cocoa by 1,901 lots in the week ended Nov. 15 to 7,744 lots in the week, according to the exchange.

Cocoa is considered more vulnerable than other agricultural products because chocolate sells better when economies are strong, analysts at Credit Suisse said. In addition, the market is "heavily overvalued," because the political turbulence in the Ivory Coast earlier this year didn't damage the country's cocoa production.

Analysts say ample cocoa supplies from West African countries like Ivory Coast and Ghana, which supply half of the world's cocoa, should keep a lid on price gains. Both the Ivory Coast, despite the violence, and Ghana recorded record cocoa harvests last season, said Laurent Pipitone, director of the economics and statistics division of the International Cocoa Organization.

Total African production rose by almost 30% on the previous season, Mr. Pipitone said. Most of the world's cocoa—about 70%—will be produced in Africa this season, and Ghana will show the largest growth in production, he added. However, production for the current season could be as much as 5% below that of last year, as the weather hasn't been as favorable and declining prices could discourage effective crop care.

He conceded there was still some concern about prices falling further, but said he wasn't sure if cocoa could decline "to a much lower level" given recent falls, despite the large amount of supply. But for the moment, the fear that the global economy will slip into a double-dip recession seems to be eroding the consumer's sweet-tooth—both for chocolate and cocoa.

Chocolate Binge topping $100 billion boosts Cocoa after slump: Commodities

Bloomberg

By Isis Almeida; ialmeida3@.

Nov 24, 2011

Global sales of chocolate confectionery rose 34 percent to $102 billion in the past five years. Photographer: Gianluca Colla/Bloomberg

Shrinking cocoa harvests in West Africa, the largest producing region, are diminishing a glut of beans just as sales of chocolate confectionery exceed $100 billion for the first time ever.

Global supply will decline 7.7 percent in the year to September, shrinking the surplus to 32,000 metric tons, from 434,000 tons a year earlier, according to Marex Spectron Group Ltd., which trades the beans in New York and London. Grindings, a measure of demand, will gain 1.9 percent to a record 3.9 million tons, according to the median estimate of 10 analysts and traders surveyed by Bloomberg. Prices will rise 12 percent to $2,700 a ton in three months, Goldman Sachs Group Inc. estimates.

Cocoa slumped 36 percent since March as a supply glut widened and exports from Ivory Coast, the biggest producer, resumed after a civil war. Global sales of chocolate confectionery rose 34 percent to $102 billion in the past five years, led by developing regions even as global growth slows, according to Euromonitor International Ltd., a London-based consumer research company.

“Grindings will rise again this year because demand continues to grow in emerging markets even as economies slow in Europe and the U.S.,” said Kona Haque, an analyst at Macquarie Group Ltd. in London who has covered commodities for 14 years. “The Asians and Latin Americans have finally found a taste for chocolate-based confectionery such as biscuits and ice creams.”

Net-Short Position

Cocoa fell 21 percent to $2,404 this year on ICE Futures U.S. in New York, heading for the biggest annual drop since 2003. The Standard & Poor’s GSCI index of 24 commodities rose 1 percent this year as the MSCI All-Country World Index of equities fell 15 percent and Treasuries returned 9.7 percent, a Bank of America Corp. index shows.

Hedge funds and other large speculators held a net-short cocoa position, or bets on lower prices, of 1,866 futures and options in the week ended Nov. 15, Commodity Futures Trading Commission data show. That’s down from 14,120 contracts in October, when they were the most bearish in 11 months.

Output in Ivory Coast, accounting for 40 percent of last year’s supply, will slump 18 percent this season after too little rainfall and the spread of black pod, a fungal disease, Marex estimates. Farmers in neighboring Ghana, the second- biggest producer, will reap 14 percent less this season, the brokerage predicts. Global supply will drop to almost 3.9 million tons from 4.22 million tons.

Civil War

The rebound anticipated by Goldman wouldn’t return prices to the 32-year high of $3,775 reached in March, when Ivorian supplies were disrupted by a civil war that erupted after disputed presidential elections in November. Commerzbank AG expects a first-quarter average of $2,700, 18 percent less than a year earlier and the lowest for the period since 2009.

The decline from a year ago will help contain costs for Vevey, Switzerland-based Nestle SA, whose chocolate brands include Milky Bar and Smarties. The world’s biggest food company told investors Oct. 20 that raw-material costs would jump as much as 3 billion Swiss francs ($3.3 billion) in 2011.

Demand may be limited should Europe’s debt crisis tip economies back into a recession. Grindings dropped by a record 6.6 percent in the 2008-09 crop year, during the worst global contraction since World War II, according to data from the London-based International Cocoa Organization. Futures retreated as much as 42 percent in the four months ended November 2008.

Cocoa Grindings

“If the situation in Europe affects other major economies in the world more than we currently expect, we could then see weaker grindings,” said Jonathan Parkman, head of agriculture at Marex in London. “I wouldn’t rule out having this conversation in a year’s time, looking back to find that cocoa grindings were actually down.”

Economists aren’t anticipating a repeat of the global recession. The world economy will expand 4 percent next year, unchanged from 2011, the International Monetary Fund forecast in September. Developing economies in Asia will grow 8 percent and Latin America 4 percent, the Washington-based group estimated.

Sales of chocolate confectionery in Latin American will reach $10.35 billion this year, more than double the amount in 2006, Euromonitor estimates. Asia-Pacific sales will reach $11.6 billion, 53 percent more than five years ago.

When beans are ground, about 80 percent is turned into cocoa liquor, which is then processed into powder and butter, according to the website of Barry Callebaut AG, the world’s largest bulk chocolate maker.

Commodity Risk

Demand in Asia is dominated by cocoa powder, used to flavor cereals, drinks and baked products, according to Shawn Hackett, president of Hackett Financial Advisors Inc., a brokerage and consultant based in Boynton Beach, Florida. Cocoa butter, used in chocolate bars, traded at a premium to the powder from 2002 to 2010, switching to a discount in about mid-2010, according to Commodity Risk Analysts, a researcher based in New York.

Cocoa grindings will also expand as processors add capacity. Barry Callebaut said Nov. 18 it formed a venture to build a processing plant in Indonesia. The Zurich-based company is also expanding five of its factories. Cargill Inc., based in Minneapolis, is enlarging its plant in the Netherlands. “Grinders could be encouraged to rebuild stocks,” said Lysu Paez, a Paris-based analyst at Natixis SA, the investment- banking and asset-management unit of Groupe BPCE. “If demand from emerging countries turns out to be sustained, it could help the market to recover.”

Ivorian cocoa prices fall on oversupply-farmers

Reuters Africa

Nov 24, 2011

ABIDJAN Nov 24 (Reuters) - Cocoa farmgate prices in Ivory Coast's principal growing regions fell last week, weighed by abundant supply in the bush and a decline of port prices driven by fears over slowing demand in Europe, farmers and local buyers said on Thursday.

In western region of Soubre, at the heart of the cocoa belt, farmers said prices fell to between 650 CFA francs and at more 700 CFA per kg, from between 750 and 800 CFA francs the previous week, as beans were abundant and buyers reluctant to pay more. "The farmers are not happy. Prices have fallen a lot because there's just so much cocoa in the bush," said farmer Lazare Ake. "The buyers are giving us any price they want because they know we're in desparate need of money."

In the centre-western region of Daloa, farmers also said the average price had fallen to between 625 CFA francs and 700 CFA per kg, from 750 and 800 the previous week, as driven by a fall in prices at the the port of Abidjan. "Prices are down. The exporters are saying that prices are not good in London," said farmer Marcel Aka. "Some farmers are refusing to sell, but a lot of them have no choice with Christmas coming up."

In the coastal region of San Pedro, farmers said many of them were selling as low as between 625 and 675 CFA francs, from about 800 CFA the previous week, as delivery prices had sharply fallen at the San Pedro port. "Nobody is respecting the government's indicative price of 1,000 francs," lamented farmer Labbe Zoungrana.

A local buyer of a major exporter based in Abidjan said some of them were monitoring the crisis in Europe as they feared will hit cocoa demand. "What we fear is that the economic crisis means Europeans will eat less chocolate," the buyer said.

Ivory Coast seeks chocolate fairness for farmers

CNN

By Eoghan Macguire, for CNN

November 25, 2011

(CNN) -- The world's chocolate makers may specialize in delivering a sweet taste but the government of the Ivory Coast is seeking to address what it sees as the bitter treatment of the farmers who grow the industry's raw materials.

The West African nation was the world's biggest cocoa producer -- which is the main ingredient in chocolate -- between 2009 and 2010, rearing some 1.19 million tons of the crop according to the International Cocoa Organization (ICCO).

Thanks to a mixture of price volatility, internal instability within the Ivory Coast and a lack of protection from speculators however, an ever smaller portion of the billions of dollars of annual revenue the industry creates finds its way back to the country's farmers.

While this set up may benefit cocoa buyers and chocolate companies, non profits such as the International Cocoa Initiative (ICI) have claimed that it forces farmers to pay low wages and encourages exploitative practices such as child labor.

Bittersweet times for Ivory Coast's cocoa industry

Ivory Coast reforming cocoa

But according to Sangafowa Coulibaly, the Ivory Coast's agriculture minister, central government efforts are now being made to make the cocoa production process fairer and more profitable for farmers. "The profits made from the sale of cocoa have unfortunately not been beneficial enough to the farmers because of poor governance," he says.

Coulibaly highlights the fact that farmers receive around a 40% share in the price of the cocoa they grow. This, he claims, is not commensurate with the costs the process incurs and in the coming years he hopes to see this figure rise to 60%.

He also blames the country's former president, Laurent Gbagbo -- who refused to concede defeat in elections in October 2010, leading to a six month long standoff before he was finally forced from power by military force -- for slowing reforms that will benefit the country's cocoa growers.

Now that the political infighting is over and a new government in place however, Coulibaly says that changes will be made to ensure the long term viability of one of the country's most integral industries. "Things can only get better," he says. "The political crisis is behind us -- the armed conflict is behind us. Ivory Coast has become a country that aspires to be stable," he adds.

The profits made from the sale of cocoa have unfortunately not been beneficial enough to the farmers Sangafowa Coulibaly, Ivorian Agriculture Minister. With the Ivory Coast contributing to roughly 40% of global cocoa produce alone, such clear intentions of creating a durable and equitable production process should be good news for the world's chocolate companies, as well as the country's cocoa farmers. But while Coulibaly is adamant that the central government is genuine in its attempts to help farmers, his words are met with a wary skepticism by those at the sharp end of the debate.

Toure Dramane is a farmer and owner of a cocoa co-op deep within the Ivory Coast's rural hinterland. He says that unless real changes are made to ensure farmers are paid a fair price for their produce they will be forced to employ children and pay low wages, which in turn will create a variety of long term social and humanitarian problems.

The human cost of chocolate

"It's not our choice; it's imposed on us," he says of the price he receives for his cocoa produce.

"We can't transform it. We produce it and we sell. We get the price that is imposed on us. We can't do it any other way."

Dramane says that promises of reform to make cocoa farming fairer and more profitable have been made many times before. He cites a pledge made by the world's leading chocolate companies to help end child labor almost a decade ago. "[But] in ten years, nothing has been done at all" to address this issue he says, ensuring he remains suspicious about the new government's proclamations no matter how good they sound. With previous broken promises in mind, Dramane adds that he will reserve judgment about whether conditions will be any different or fairer for farmers until he sees the price he receives for his next harvest.

Cocoa may advance as much as 13% on Demand, Macquarie Says

BusinessWeek

By Isis Almeida and Maria Kolesnikova

November 25, 2011

(Bloomberg) -- Cocoa may rebound as much as 13 percent in the next two months in New York on demand for the chocolate ingredient during Christmas and Easter, according to Macquarie Group Ltd.

Cocoa may gain to $2,500 to $2,700 a metric ton on ICE Futures U.S., the bank estimated. Cocoa has fallen 25 percent in London and 21 percent in New York this year on speculation supplies will outpace demand for a second year in the 2011-12 season started last month. “On the demand side, things still look positive,” Kona Haque, an analyst at the bank in London, wrote in a report dated yesterday. “Powder demand is still very strong, and EU and U.S. third quarter grindings were above expectations.”

Cocoa powder is used to make chocolate-based products such as ice-creams, biscuits, baked goods and soft drinks. Demand for powder is more prominent in emerging markets, especially Asia, according to Shawn Hackett, president of Hackett Financial Advisors Inc., a consultant based in Boynton Beach, Florida.

Cocoa for March delivery slipped 0.8 percent to $2,384 a ton by 7:46 a.m. on ICE Futures U.S. in New York, the lowest since May 2009. Cocoa for December delivery fell 0.9 percent to 1,504 pounds ($2,329) a ton on NYSE Liffe in London.

Global cocoa processing will rise 2.6 percent in the 2011-12 season, down from 3.9 percent a year ago, the bank estimated. The world market will have a “modest” surplus, it said. “This means prices are likely to be lower than last season,” Haque said. “We no longer see $3,000 as a possibility.”

Demand for cocoa butter, which accounts for about 20 percent of the weight of a chocolate bar, remains slow, Macquarie said. Butter inventories are estimated at 200,000 tons, it added.

Interest in the product could rise as its price edges closer to that of vegetable oils, which can be used as a substitute, according to Haque. “It may not be long before we see some substitution away from vegetable fats, back into cocoa butter.”

Swiss Cocoa Firm joins with local operator for New Plant in Makassar

Jakarta Globe

By Francezka Nangoy

November 23, 2011

Barry Callebaut, a Zurich-based manufacturer of cocoa and chocolate products, plans to set up a joint venture with an Indonesian company to ensure a sustained supply of processed cocoa from the Southeast Asian nation. (Reuters Photo) Barry Callebaut, a Zurich-based manufacturer of cocoa and chocolate products, plans to set up a joint venture with an Indonesian company to ensure a sustained supply of processed cocoa from the Southeast Asian nation.

Barry Callebaut, a Zurich-based manufacturer of cocoa and chocolate products, plans to set up a joint venture with an Indonesian company to ensure a sustained supply of processed cocoa from the Southeast Asian nation.

Barry Callebaut and Comextra Majora — a soft commodities and cocoa exporter — will form a joint venture to be called Barry Callebaut Comextra to tap into supplies in Indonesia, the world’s third largest cocoa producer. BCC, of which 60 percent will be controlled by Barry Callebaut and the remainder Comextra, will be incorporated in Makassar, South Sulawesi.

BCC will invest 30 million Swiss francs ($33 million) to build the cocoa-processing facility, also to be located in Makassar. The plant is expected to start operating in 2013 and will be able to grind as many as 28,000 tons in the first year. Under the agreement signed between the two companies, Barry Callebaut will operate and manage the factory and purchase all the products, while Comextra will provide the cocoa beans.

Comextra has for the past 10 years been shipping cocoa beans to Barry Callebaut, which hopes to maintain a steady supply in Indonesia. “Sustainable cocoa will ensure a better income for the cocoa farmers and secure sufficient cocoa supplies for our future growth ambitions, scaling up our certified cocoa volumes at the same time,” said Juergen Steinmann, chief executive of Barry Callebaut.

Barry Callebaut, which sells its products to chocolatiers, pastry chefs and bakers, has operations in 27 countries and has around 40 production facilities. The company posted about $5 billion in sales in its latest fiscal year.

Jimmy Wisan, chief executive of Comextra, will become chief executive of the joint venture. Jimmy said the joint venture would be a natural progression of Comextra’s longstanding cocoa-supply partnership with Barry Callebaut. “It will nicely leverage our on-the-ground bean-sourcing network as well as our business experience and the relationships we have developed in and outside the food industry during decades in Indonesia,” Jimmy said.

Barry Callebaut AG: Increasing capacity to sustain growth in the Gourmet & Specialties Products business

Reuters (press release)

Nov 17, 2011

Zurich, Switzerland/Kågeröd, Sweden - Barry Callebaut AG, the world's leading manufacturer of high-quality cocoa and chocolate products, today celebrates the inauguration of an extension to its dedicated spray-drying production facility in Kågeröd in southern Sweden. This CHF 10 million (EUR 8 million) investment increases the capacity of Barry Callebaut's centre of competence for beverages for producing spray dried products by up to 50%.

With the capacity extension at its specialty production site, Barry Callebaut will be able to further grow the company's Gourmet & Specialties Products business, serving professional users with convenient products offered under a variety of beverages brands.

The newly installed spray tower will commence production in December 2011. The capacity increase will partly be used for fulfilling a long-term supply agreement Barry Callebaut signed with an international specialty coffee company at the end of 2010.

Juergen Steinemann, CEO Barry Callebaut, said: "The inauguration of the new spray tower in Kågeröd marks another important milestone in growing our Gourmet & Specialties Products business. In the last decade we have continuously invested in our Beverages business and built an innovative center of competence in the south of Sweden."

Barry Callebaut's beverages products - produced centrally, sold globally

The Beverages division is a part of the Gourmet& Specialties Products business of Barry Callebaut.Headquartered in Sweden, it is a leading player in Europe in the area of cocoa based powder solutions used in chocolate, cocoa and cappuccino beverages. Through its Beverages division, Barry Callebaut serves the vending and office coffee industry as well as the HORECA (hotels, restaurants and caterers) business. At its domicile in Kågeröd, Barry Callebaut operates an integrated, state-of-the art production site, where most of the beverages products are manufactured. They are mainly marketed in Europe, but are also delivered to customers all over the world.

COTE D'IVOIRE: Cocoa farmers hope reforms will pay off



November 21, 2011

Members of a cocoa growers cooperative in Sikensi, 100km northwest of Abidjan

ABIDJAN, 21 November 2011 (IRIN) - Income for cocoa farmers in Côte d'Ivoire is expected to rise after reforms announced by President Alassane Ouattara’s government in early November.

Producers should then receive 50-60 percent of the international cocoa price for their beans, rather than the 35 percent they get today, according to Minister of Agriculture Mamadou Sangafowa Coulibaly.

The international price, also termed the Cost, Insurance and Freight (CIF) price - where the seller pays the costs, freight and insurance to get the goods to the destination port - refers to the price of cocoa that is ready for export.

The government is making these reforms as a result of conditions set by the World Bank and the International Monetary Fund (IMF), which will allow it to gain access to US$3 billion of debt relief under the Heavily Indebted Poor Countries Initiative. Minister of Economy Charles Koffi Diby said on 8 November that the government plans to put the reforms in place before the end of 2011, and is expecting debt relief to be approved before the end of 2012.

Cocoa brought Côte d’Ivoire $1 billion in foreign exchange receipts in 2006, compared to $1.3 billion from oil and other refined products, according to the IMF. The country produces around 40 percent of the world’s cocoa and delivered a record harvest of nearly 1.5 million tons of beans in 2010-2011.

Some 900,000 farmers in Côte d’Ivoire grow cocoa, and 3.5 million people live off the income generated by related activities, according to the World Bank.

Changes

The reforms put the onus on the government to regulate the sector more firmly. In a shift in policy seen in many other sectors, the World Bank and IMF now require stricter regulation, having pushed for liberalization of the sector 13 years ago.

The government plans to set a guaranteed price for cocoa before the next season, which begins in October each year and ends the following September. This measure should put Côte d'Ivoire in a better position to influence global cocoa prices, said government spokesperson Bruno Koné.

Under liberalization the government announced an indicative price to be paid to producers at the beginning of each season, but this was often not respected. In reality, cocoa prices tended to fluctuate daily.

The set price for the 2010-2011 season was 1100 CFA francs ($2.26) per kg, but the average price achieved was 805 CFA francs ($1.65) per kg, according to Côte d'Ivoire’s Coffee-Cocoa Management Committee.

The 2011-2012 indicative price was $2.06, but in the week of 24-31 October, farmers received only $1.50 on average for their beans, and many are refusing to sell until prices rise. “Few trucks leave the farms to the ports. Farmers are waiting to sell, even if [that means] the quality of their cocoa could deteriorate”, said Bilé Bilé, head of a cooperative of 637 producers in Abengourou, near the Ghana border

Bags of cocoa beans ready for sale

Other changes include setting up a single regulatory body to oversee the sector, replacing the four institutions currently performing this function. Minister Coulibaly also said 70-80 percent of the harvest will be sold before the start of each season, so that the income of producers and the state is more predictable.

Before liberalization, the Caisse de Stabilisation et de soutien des prix des productions agricoles (CSSPPA) - the stabilization fund and support prices of agricultural products, also known as Caistab - managed the sector, but was seen by many to be un-transparent and inefficient in its dealings, said Samir Gadio, West Africa economic analyst at Standard Chartered Bank in London. He also noted that deregulation did not improve transparency.

Minister Coulibaly is stressing transparency. “We saw too many abuses under liberalization; we now want to put good governance at the heart of the reforms,” he told reporters at the launch of the policy changes.

Gadio said analysts will be closely monitoring just how independent the new regulatory body is.

Farmers should gain

Farmers’ associations have largely welcomed the reforms. Mamadou Koné, who leads a producers' cooperative in Duékoué, western Cote d’Ivoire, told IRIN that the reforms should enable growers to stop "being delivered to the fluctuation of the international market… with a minimum price to refer to each season, we can better plan for the future.”

Despite a record crop in 2010-2011, farmers still struggled to get by, with cocoa prices inconsistent and usually too low. Bilé Bilé, head of the Abengourou cooperative, told IRIN the price set by the government had never been respected. “Producers never received enough, while the cost of living - and of rice.-.has continued to climb,” he told IRIN. Many producers have struggled to make a profit after covering the cost of fertilizers, pesticides and transport, all of which have soared in recent years.

Farmers continued to harvest despite the post-electoral violence that hit the country - much of it in cocoa-growing regions - and a three-month ban on exporting beans imposed in January 2011 by President Alassane Ouattara to cut off the finances of ex-President Laurent Gbagbo during the crisis.

The agricultural facet of the cocoa industry is expected to expand by 1.7 percent in 2011, while the industrial side seems set to shrink by 8.4 percent and the services side by 13.4 percent, according to the finance ministry.

Greater voice

Many producers complain that they have not had enough say in the reform discussions. Gervais Seri, president of the National Association of Coffee and Cocoa Producers, told IRIN: "Farmers are at the heart of the industry, so as producer associations, we are recommending that we sit on the board of the new regulatory structure.”

More detail is needed on exactly what the government is proposing, said a foreign diplomat who requested anonymity. Thus far the government has been generous with information in broad terms, but has not provided any details of exactly how the reforms will work.

"Cocoa is a business matter,” Amoikou Boi, a producer in the eastern town of Abengourou, told IRIN. “The State should not impose [changes] without consulting producers.”

Ivory Coast to replant Cocoa Trees with Faster-Growing variety

BusinessWeek

By Baudelaire Mieu

November 23, 2011

(Bloomberg) -- Ivory Coast, the world’s biggest cocoa producer, will replant 30,000 hectares (74,131 acres) of aging trees with a variety that produces pods within 18 months, said Tiemoko Yo, director of the National Center for Agronomic Research.

As many as 15,000 farmers will benefit from the program, he said in Yamoussoukro, the capital, today. The distribution of the new seeds started this month and will finish in late December, Yo said.

Ghana to receive second part of Loan for Cocoa Purchases

BusinessWeek

By Moses Mozart Dzawu

November 25, 2011

(Bloomberg) -- Ghana’s central bank will receive $1 billion, the second part of a loan used to finance purchases of cocoa from farmers, fueling plans by the lender to offer more dollars to stem a decline in the cedi.

The money is expected by the Accra-based Bank of Ghana either today or next week, said Adams Nyinaku, head of treasury. The local currency weakened to the lowest on record today, depreciating 0.6 percent to 1.643 per dollar.

Ghana Cocoa Board, which buys the beans from farmers, signed the syndicated loan for a total of $2 billion with more than 20 international and local banks in September. The board swaps the dollars for local currency at the central bank. “Economic growth has seen the number of companies that buy dollars increased,” Nyinaku said by phone today. “We want to match it by raising the liquidity we provide on the foreign exchange market.”

Duffour worried about uncertified cocoa beans



November 22, 2011

Minister of Finance and Economic Planning, Dr. Kwabena Duffour

Ghana, the world’s second-largest cocoa grower, is worried about the slow pace of growth in the volume of certified cocoa beans produced in the country.

According to the Minister of Finance and Economic Planning, Dr. Kwabena Duffour, “This symbolises the practical challenges associated with the processes in securing the licence as a certified cocoa grower.”

He explained that emerging developments from within the global cocoa economy point to increasing consumer preference for certified cocoa beans. “This offers producing countries the opportunity to expand the scope of certification to cover more growers and increase production in consonance with the current and future demand.”

Dr. Duffour was addressing participants at a two-day national cocoa stakeholders’ conference in Accra on the theme “Partnership for Cocoa Sustainability”, organised by a non-governmental organisation, West Africa Fair Fruit (WAFF).

Also, he added, there are no clearly-defined stakeholder responsibilities for certified cocoa in the supply-chain in relation to the rules of the Federation of Cocoa Commerce (FCC). “Therefore, specific roles with responsibilities assigned to the respective stakeholders need to be well-defined to fit into FCC rules to encourage collective acceptance.”

Cocoa certification was introduced in Ghana by Fairtrade, which certified farmers of Kuapa Kokoo Limited. Rainforest Alliance and UTZ also later introduced their certification brands with farmers of Cocoa Abrabopa Association. The third certification scheme is the organic certified label.

Within the last couple of years, cocoa certification bodies have gradually amplified consumers’ calls for greater transparency in the cocoa supply-chain. Their message, supported by the processing industry, has successfully generated considerable interest within the global cocoa economy.

Dr. Duffour, whose speech was read by Mike Owusu-Manu, the technical advisor in-charge of cocoa affairs at the Ministry of Finance, disclosed that the Alliance of Cocoa Producing Countries (COPOAL) is in the process of developing a certification standard for its member-countries.

This, he said, will involve a system of harmonising cocoa certification schemes across the different countries, and providing a platform where a COPAL certification standard/scheme will be developed, to achieve market equilibrium -- taking into consideration the different national and international standards on cocoa trade and food safety as well as other market fundamentals.

The member-countries of the Alliance account for approximately 75 percent of total world cocoa production. There are currently 10 member-countries: namely, Brazil, Cameroon, Côte d'Ivoire, Dominican Republic, Gabon, Ghana, Malaysia, Nigeria, Sao Tome and Principe, and Togo.

The Regional Cocoa Programme Manager of the West African Fair Fruit, Cyril Ugwu, said the certification of cocoa production is one of the sustainable instruments employed in the cocoa supply-chain culminating in large-scale certification, which has been taken up by some cocoa grinders including Cargill, ADM and Petra Foods. He urged Ghana to strategise to compete with the fast-growing 50 producing countries in the world, who now advertise their produce on the traceability portals of standard systems for easy sourcing by processors.

In the previous cocoa season, chocolate-maker Cargill paid an extra US$2.2million directly to 26,500 farmers for 20,000 metric tonnes of UTZ and RA certified cocoa in Cote d’Ivoire. The supply-chain actors in other countries using the standards are now getting higher product quality and supply, greater long-term security of supply, strong business relationships, and good traceability system.

In Ghana, WAFF/Solidaridad is very vibrant in the cocoa sector, promoting UTZ-certified code of conduct to enhance the capacity of farmers to produce cocoa in a more environmentally sustainable, economically viable and socially responsible manner.

WAFF/Solidaridad is implementing four core cocoa projects in partnership with Care International, which has led to strong farmer associations known as AHANSUCOFA, Yayra Glover Limited, Worldwide Fund for Nature (WWF), and Conversation Alliance in Ashanti, Eastern, Western, and Central Regions respectively.

Cocoa on the boil?

Trinidad & Tobago Express

By John Spence, professor Emeritus, UWI

Nov 24, 2011

Agriculture and the budget — Part IV

I was heartened to learn that the Minister of Food Production, Land and Marine Affairs will support expansion of the cocoa industry. However, I shall adopt a wait-and-see position for I have spent many hours sitting on committees which have produced reports for governments for revival of this industry and no action followed. The first time was in 1992, the second in 2002.

The third time was earlier this year when Ken Gordon, who was then chairman of the Economic Development Board, requested me to give some advice on revitalising the cocoa industry.

A team was assembled consisting of a member of the staff of the Cocoa Research Unit at UWI, who is fast becoming a world expert on cocoa flavour, a businessman who is owner of one of the older and finest cocoa estates in Trinidad, the lady manager (a UWI graduate in agriculture) of one of the fasting growing set of replanted cocoa estates in Trinidad and a cocoa scientist from the Ministry of Food Production, Land and Marine Resources.

The owner of one of the most efficient cocoa estates was also invited. He was unable to join the team but gave some advice.

This team produced a report for Mr Gordon and I am informed that a copy was also given to the Minister of Food Production. I have Mr Gordon's permission to refer to the report and to outline some of the advice given by the committee.

Below I reproduce some aspects of the report with suitable modification:

Trinidad and Tobago enjoys a healthy comparative advantage in cocoa production with its unique combination of rich cocoa history, suitable soils and climate, investment in intellectual capital by having the longest continuous cocoa breeding programme in the world, a one-of-a-kind universal collection of unique cocoa varieties, high demand and premium prices.

Indeed cocoa was the highest contributor to the national treasury during the period 1900-1920 and today has the potential to contribute very significantly to our GDP as well as contributing substantially to our export earnings.

Despite these positive attributes, it seems paradoxical that cocoa production in Trinidad and Tobago has declined from a production peak in 1921 of over 35,000 metric tonnes, to a low of 600 tonnes today.

The cocoa industry cannot develop sustainably with the current production of between 400-600 metric tonnes therefore as a first step we need to increase cocoa production urgently. Our cheaper energy costs compared to other countries for chocolate making offer an immediate comparative advantage that should be tapped for value-added products.

The report recognised that cocoa production could be increased to 33,500 metric tonnes. To achieve this, the committee estimates a yield of 1340 Kg per acre from an 8 feet x 8 feet (2.4 metres x 2.4 metres) tree spacing giving 670 plants per acre and assuming a conservative per tree yield of 2 Kg. With these assumptions, approximately 25,000 acres (10,117 hectares) of land will need to be under intensive cocoa production.

The following further recommendations are made:

1. Initially 100 new cocoa farms should be established by Government in Trinidad and 20 farms established in Tobago.

2. Farm size should be not less than 20 hectares (based on the financial and economic models investigated).

3. Each farm must have a house.

4. Land preparation, infrastructure and drainage should be provided by the Government.

5. Sufficient and suitable planting material must be provided for this programme.

6. Farmers selected for the Revitalisation Programme should be:

University graduates with preference given to agriculture graduates; graduates of Eastern Caribbean Institute of Agriculture and Forestry (ECIAF); farmers with at least five years work experience on a cocoa estate and preferably with some training (e.g. in programmes such as YAPA); private land owners willing to invest in commercial cocoa production.

7. Further incentives.

a) Implement mechanisms to provide crop insurance.

b) Release suitable State lands to farmers and purchase or lease suitable lands from private land owners for growing more cocoa.

c) Provide education and training for farmers.

8. Value added.

The estimated revenues from value added products are 10-15 times that derived from the sale of cocoa. Pursuing a cocoa value added sector is therefore economically feasible but must be coupled with superior product development, packaging, branding and marketing, starting with partnerships with a foreign chocolate manufacturer. However, increasing cocoa production is the first step towards realising the potential of this value added sub-sector.

The economic analysis models presented in this report highlight the enormous potential that the cocoa sector has in contributing to national GDP. With a conservative yield of 2 Kg per tree (or 1,340 Kg per acre) the industry has the potential to earn TT$115 million locally from taxes on profits in the 16th year of production.

There is also the potential to earn US$917 million in foreign exchange from the export of beans at a conservative price of US$4,500 per tonne also from the 16th year of production.

Local entrepreneurs who are interested in developing this sector can enter into a contractual arrangement with an existing fine chocolate company abroad to develop local and export markets for a premium quality dark chocolate with the aim of eventual local manufacture. This will be a longer term opportunity after cocoa production has increased.

With the high yields expected from new varieties; modern systems of planting; and novel organisation of production systems, for example, companies providing such common services as harvesting for groups of farms, the perennial complaint of labour shortage can be successfully addressed.

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Inside THIS ISSE:

ISSUE NO. 467 21ST – 25TH NOVEMBER, 2011

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Research & Development

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