Cocoa prices up on poor imports, good demand.

Kochi: Indian cocoa prices have jumped by more than 20% to 25% in just three months because of falling imports of cocoa beans and chocolate preparations and strong domestic demand.

Robust domestic consumption and good export orders have pushed up demand for Indian cocoa, while supplies are almost 40-50% less than the demand. According to a data provided by the Kochi-based Directorate of Cashew and Cocoa Development (DACCD), imports in the current financial year have fallen by 8-10% as compared to the previous financial year.

India imported 19,000 tonne of cocoa products in 2007-08 including beans, paste, butter and chocolate preparations. The total value of imports was estimated to be around Rs 189 crore, which dropped to Rs 184.5 crore in 2008-09.

According to DACCD, export realisation in the last financial year was estimated to be around Rs 61 crore.

High domestic prices for cocoa beans is also leading to lesser exports, Shiny George of Indian Organic Farmers Company said. “Average price for dry cocoa beans have moved up to Rs 170 per kg in the Idukki district. The commodity is in short supply and demand is very good,” she added.

Procurement prices of cocoa are already high in India as buyers compete for the crop. “Dry beans were selling at around Rs 130-140 per kg in December 2009, while wet beans were sold at around Rs 38-45 per kg,” she said.

Around the same time in 2008, dry cocoa beans fetched around Rs 80 per kg, while wet beans fetched Rs 25-33 per kg.

Indian demand for cocoa is increasing at a healthy rate of 8% per annum.

The Indian chocolate market is worth around Rs 15 billion and offers great potential for Western chocolate manufacturers as demand is still in its early stages.

Chocolate consumption is gaining popularity in the country because of increasing prosperity coupled with a shift in food habits, pushing up the country’s cocoa imports.

India’s cocoa consumption is growing at around 15% annually and is expected to touch 30,000 tonne in the next five years.

International chocolate manufacturing companies are also increasingly procuring cocoa from domestic markets because quality of Indian cocoa beans is better compared to others, Venkatesh N Hubbali, director of DACCD told FE.

“Few chocolate manufactures from Holland have come recently to the Indian market for purchasing cocoa adding to the pressure on prices. Big firms like Cadbury and Nestle are also increasingly using Indian Indian cocoa,” he added

Source : Financial Express