Chocolates to Turn Costly on Soaring Cocoa Prices.

KOCHI: Chocolate manufacturers appear to be getting ready for another round of price increase as domestic cocoa has become costlier amid a poor second harvest. The runaway rise in cocoa bean prices compelled companies such as Campco to raise product prices a few months ago.

Consumption is all set to rise during Deepavali but companies like Cadbury are not worried as they rely on imports as much as local purchases. Global prices of cocoa beans have fallen and the imported beans are cheaper than the local varieties despite the duty and the quality is better.

Campco, which doesn’t depend on imports, went for a 10-15% increase in products prices three months ago. “Though we are not importing beans, we import about 700-800 tonnes of cocoa powder for our use. The price of cocoa powder is still ruling at high levels,” Mr AS Bhat, MD of Campco, told ET. With the reports of a low second round of cocoa harvest, chocolate companies think prices may not drop in the next few months. The dry bean prices are hovering around Rs 160 per kg now. Campco’s annual requirement is around 4000 tonnes of cocoa beans.

Cadbury India, which mops up around 10,000 tonnes from the domestic market, has not passed price rise on to consumers. According to sources in Cadbury India, the second cropping period beginning August has not yielded good results. The high prices are prompting farmers to go for an early harvest before the pod ripens. Along with unseasonal rains, this has affected the quality. This may force Cadbury to have a rethink on the price for the wet beans.

Source : economictimes.indiatimes.com