Cocoa prices fall on weak global trend
Indian cocoa prices have dropped significantly, as have those abroad, for a variety of reasons.
The global decline has been 30-40 per cent over eight-odd months. A bumper crop in the previous season from benign weather in West Africa pressed prices down. Ivory Coast and Ghana are the world’s top producers of cocoa beans, accounting for a little more than twothirds of global supply. At the London exchange, dry cocoa dropped from $3,100 a tonne to about $2,000 a tonne.
The global decline has led to a rise in import; 55-60 per cent of India’s need comes from abroad. In addition, the import duty on cocoa was cut earlier this calendar year to 10 per cent, from the earlier level of 30 per cent. As a consequence, prices in the domestic market have, in eight-odd months, dropped to ~130160 a kg, from the earlier ~200-210 a kg.
Suresh Bhandary M, managing director, The Central Arecanut and Cocoa Marketing and Processing Co-operative (Campco) said they normally held three months of stock but presently had eight months’ worth. The crop at home had also been good, he explained, with the current season’s output 10-15 per cent above the earlier one. Normally, the main crop starts coming to the market by the end of May; this season, it started in March itself.
Says Nitin Chordia, this country’s only certified cocoa and chocolate taster: “No other crop has seen such a price fall. The same thing had happened in the 1970s and again now. We have helped farmers and chocolate makers find international markets for their produce and this should be seen as an opportunity to value-add and take advantage of lower raw material cost.”
In the past 45 days, said Bhandary, 15,000 quintals of cocoa had arrived in the market every week; normally, this would not exceed 2,000 quintals. “We (Campco) are the only ones to buy, since we encourage the farmers to cultivate cocoa. We don't want them to be in trouble and so we bought everything.”
Around half of Indian cocoa is grown primarily as an inter-crop, in Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. In 2015-16, the harvest was 17,200 tonnes of cocoa beans.
Directorate of Cashew Nut and Cocoa Development data shows production rose to 18,920 tonnes in 2016-17, from 17200 tonnes a year before. Productivity rose to 580 kg a hectare, from 550 kg a ha. Total consumption in 201516 of cocoa beans was around 30,000 tonnes.
Prices in the domestic market have, in eight-odd months, dropped to ~130-160 a kg, from the earlier ~200-210 a kg