Cocoa Sector Analysis Ver 2.0
Transcript of Cocoa Sector Analysis Ver 2.0
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Cocoa Sectoral Analysis
Kamal Raju Gotte 24B
Rajesh A. Jaddu 38B
Shreyash Agarwal 42C
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History
Cocoa bean is the dried and fully fermented fatty seed of Theobromacacao, from which cocoa solids and cocoa butter are extracted. They arethe basis of chocolate.
The genus Theobroma originated millions of years ago in SouthAmerica, to the east of the Andes. Theobroma has been divided intotwenty-two species of which T. cacao is the most widely known.
It is the Maya who have provided tangible evidence of cacao as adomesticated crop. Archaeological evidence in Costa Rica indicates thatcacao was drunk by Maya traders as early as 400 BC.
The first outsider to drink chocolate was Christopher Columbus, who
reached Nicaragua in 1502 searching for a sea route to the spices of theEast.
But it was Hernan Cortés, leader of an expedition in 1519 to the Aztecempire, who returned to Spain in 1528 bearing the Aztec recipe forxocoatl (chocolate drink) with him.
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Physiological conditions
• The natural habitat of the cocoa tree is in the lower storey of the evergreenrainforest
• climatic factors, temperature and rainfall are important in encouragingoptimum growth
ClimateConditions
• Cocoa plants responds well to relatively high temperatures
• Maximum annual average of 30-32 C and a minimum average of 18-21 CTemperature
• An annual rainfall level of between 1,500mm and 2,000mm is generallypreferred
• Dry spells where rainfall is less than 100mm per month should not exceedthree months
Rainfall
• Hot and humid atmosphere essential for the optimum development of cocoa
• Cocoa producing countries relative humidity is generally high, often as muchas 100% during the day, falling to 70-80% during the nightHumidity
• Cocoa tree makes optimum use of any light available
• Has been traditionally grown under shade; shading is indispensable in acocoa tree's early years
Light and shade
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Cocoa tree varieties
Criollos dominated the marketuntil the middle of the
eighteenth century but todayonly a few, if any, pure Criollo
trees remain.
Forastero is a large groupcontaining cultivated, semi-wild and wild populations of
which the Amelonadopopulations are the most
extensively planted.
Amelonado varieties include,Comum in Brazil, West African
Amelonado in Africa, CacaoNacional in Ecuador and
Matina or Ceylan in Costa Ricaand Mexico.
Trinitario populations areconsidered to belong to theForasteros although they are
descended from a crossbetween Criollo and
Forastero. Trinitario planting
started in Trinidad and spreadto Venezuela and then was
planted in Ecuador,Cameroon, Samoa, Sri Lanka,Java and Papua New Guinea.
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Major Areas of Cultivation-Global
Many countries now grow
cocoa but the main
producers are -
• West Africa - Ghana,Nigeria and Cote D'Ivoire
• South America - Brazil and
Ecuador
• Asia - Malaysia and
Indonesia
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Major Areas of Cultivation - India
• Department of Agriculture onJune 30 signed a MoU withCadbury India Limited forenhancing cocoa cultivation inthe state
• Cultivation of cocoa expected
to yield about 1,000 kg ofbeans per hectare
TamilNadu's
amazinggrowth
rates
• 15,000 hectares of land to bebrought under cocoacultivation in the next 5 years
• 40% subsidy to be given tococoa processing centre;special research on cocoa,pepper and cashew dryingprocesses
Karnataka’s
cocoacultivation
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Production figures - Global
STATE2005 2006 2007 2008 2009
PDN PDN PDN PDN PDN
Côte d'Ivoire 1360000 1372000 1384000 1382000 1221600
Ghana 740000 734000 614500 729000 662400
Indonesia 642900 769386 740006 792761 800000
Nigeria 441000 485000 360570 367020 370000
Brazil 208620 212270 201651 202030 218487
Cameroon 178500 164553 179239 187532 226000
Rest of the World 1353076 1445585 1425996 1537608 1612053
TOTAL 4924096 5182794 4905962 5197951 5110540
PDN- Production in Tonnes
Source - FAO
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Production figures - Domestic
STATE
2005-06 2006-07 2007-08 2008-09 2009-10
PDN PDN PDN PDN PDN
Kerala 6490 5800 6000 6100 6344
Tamil Nadu 220 210 220 230 900
Karnataka 2750 2650 2760 2890 7250
Andhra Pradesh 715 1520 1580 2600 2704
TOTAL 10175 10180 10560 11820 12954
PDN- Production in MT.
Source - Directorate of Cashew nut & Cocoa Development (DCCD)
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Global acreage figures
STATE2005 2006 2007 2008 2009
Area Area Area Area Area
Côte d'Ivoire 2193550 2281290 2372540 2300000 2000000
Ghana 1850000 1835000 1463000 1822500 1656000
Indonesia 1235210 905730 923968 990052 1000000
Nigeria 1088700 1104000 1359550 1349130 1370000
Brazil 625384 647135 628928 641337 635975
Cameroon 520000 440000 450000 500000 600000
Rest of the World 1273996 1303529 1327369 1403016 1471118
TOTAL 8786840 8516684 8525355 9006035 8733093
Area- Area in Hectares
Source - FAO
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Domestic Productivity figures
STATE2005-06 2006-07 2007-08 2008-09 2009-10
PDY PDY PDY PDY PDYKerala 770 675 680 685 592
Tamil Nadu 330 300 300 350 443
Karnataka 825 600 600 600 3006
Andhra Pradesh 187 550 560 565 192
TOTAL 530 530 535 550 380
PDY- Productivity in Kg/Ha
Source - Directorate of Cashew nut & Cocoa Development (DCCD)
0
500
1000
1500
2000
2500
3000
3500
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Kerala
Tamil Nadu
Karnataka
Andhra Pradesh
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Country 2006 2007 2008 2009 2010
Côte d'Ivoire 1422913 1438372 1754113 2596121 3048659
Ghana 1096322 896390 974135 1578472 1931639
Indonesia 619017 622600 854585 1087485 1190740
Nigeria 5038 377325 510312 1250868 1048004
Cameroon 221863 287658 363760 659038 657484
Netherlands 53165 98337 116217 267904 566089
Rest of the World 980703 1157203 1495330 1984568 1958684
Total 4399021 4877885 6068452 9183346 10401299
Unit – US Dollar Thousand
Global Exporters of Cocoa
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Country 2005 2006 2007 2008 2009
Netherlands 690782 940831 1297984 1747822 2160467
United States of
America 779620 708659 934592 1228059 1292195
Germany 490661 688532 807676 980241 1142550
Malaysia 671187 787629 1178110 769421 971675
Belgium 351934 400010 466587 463194 585845
France 274320 371602 415819 491696 480757
Rest of the World 1817769 2172927 3340718 2904825 3292615
Total 5076273 6070190 7633819 8585258 9926104
Unit – US Dollar Thousand
Global Importers of Cocoa
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Country 2005 2006 2007 2008 2009
Ghana 8332 10960 13297 17570 8445
Indonesia 0 36 379 2128 4502
Dominican Republic 0 0 0 0 3443
Uganda 0 1265 0 1341 1975
Togo 0 0 0 93 1606
Rest of the World 11 219 22 580 3716
Total 8343 12480 13698 21712 23687
Unit – US Dollar Thousand
India’s Imports of Cocoa
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Country 2005 2006 2007 2008 2009
Netherlands 0 0 0 37 1111
Sri Lanka 0 0 0 84 556
Germany 0 0 0 0 34
France 0 0 0 0 7
Rest of the World 57 1 0 111 3
Total 57 1 0 232 1711
Unit – US Dollar thousand
India’s exports of Cocoa
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Trends in Cocoa imports
•The uncertainties surrounding the economic recovery in Europe and North America have
continued to have an impact on demand
• Absence of subsidization of cocoa production and exports makes the global cocoa trade
and the stabilization of global cocoa prices one of the most enduring issues in
international economics
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Trends in Cocoa exports
•On the supply side, bumper harvest for the current crop year as a result of good weather
conditions. Cocoa arrivals in Côte d’Ivoire are 22% higher than previous season
• Cocoa bean stocks in Europe have been depleting as a result of the Ivorian ban on
cocoa exports that occurred during the political crisis earlier this year.
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Contract Size -10 Metric
Tons
Contract Listings - March,May, July, September,
December
Quotation -Dollars per
metric ton
Contract Size -10 Metric Tons
Contract Listings - March,
May, July, September,December
Quotation -Pound per metric
ton
Ivory Coast
Ghana
Indonesia
Major Trading Markets and Exchanges
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Cocoa Value Chain
Cocoa Products
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Chocolate Industry
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Cocoa Supply Chain
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Price & Production Trends• Although there is a declining trend in real cocoa prices
• Real chocolate prices have been maintained
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•Increased from 125000
tonnes in 1900 to 3.1 Million
tonnes by 2000
•Annual average growth rate
of 3.5%
•Demand in chocolate is
increasing due rising incomesand populations
•US$1,000 increase in income
leads to 100g rise in annual
per capita consumption
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Global cocoa consumption about 3.5 million tonnes
Average growth of 2.5% per annum over the last 10 years
Chocolate consumption growing at around 3% per
annum; however, with recession demand fell in 2009
Over the last decade, cocoademand growth has been
modest in mature markets,
cocoa consumption growth
has been dominated by the
emerging markets
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GDP as a parameter for encouraging consumption
• GDP has risen strongly in emerging markets
over the last decade encouraging consumption.
• GDP growth rates are set to continue at high
levels in the emerging markets
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Supply Drivers for Cocoa
SUPPLYCOCOA
AFFECTS
NATURALPOLLINATION
WEATHER
CONDITIONS
CLIMATE
SHIFTS
FLUCTUATING
PRICES
CONCENTRATED
SUPPLY
SUSTAINABILITY
GEOPOLITICAL
TENSIONS
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DEMAND DRIVERS FOR COCOA
COCOADEMAND
GROWINGCONSUMPTIONOF CHOCOLATE
POTENTIALHEALTH
BENEFITS OFDARK
CHOCOLATE
SINGLE-ORIGININGREDIENTSSTILL NICHE
GROWINGDEMAND FOR
"FINE ORFLAVOUR"
COCOA
RECESSIONAFFECTING KEY
COCOACATEGORIES
PREMIUMGROWTH
SECTOR FORMANY
COUNTRIES
ARE CONSUMERSCHANGING
HABITS?
C B l Sh t
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Cocoa Balance Sheet
O tl k
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Outlook
Cocoa consumption grew by an average of 2.5% per annum over the last ten years.
Emerging market sales have been the engine of growth.
GDP forecasts point to continuing high levels of GDP growth in the emerging markets, particularly in Latin America and Asia.
In developed markets, per capita consumption is reaching stagnation point.
Innovation is required to maintain consumption at these levels.
Trends include: higher cocoa solid products, increase in plain chocolate, exotic flavourings, gourmet packaging but also
more private label/value products.
Cocoa arrivals at ports in world's top grower Ivory Coast reached a record 1,411,000 tonnes by Aug. 28, beating a previous 1.407million tonnes season output reached in the2003/04.
A world cocoa surplus of 325,000 tonnes is expected in 2010/11, as per ICCO. The ICCO pegged 2010/11 global cocoa output at 4.195million tonnes.
Ghana is on track to produce 1 million tonnes of cocoa this season, marking a near-60-percent jump in the world‘s No. 2 grower since
last year as per Ghana Cocoa regulator
Recent News
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Sources and references
• Directorate of Cashew nut & Cocoa Development (DCCD)• UNCTAD.org
• FAOSTAT.FAO.org
• Worldcocoafoundation.org
• www.indiastat.com
• http://www.icco.org/economics/promotion.aspx
• http://www.hindu.com/2011/05/08/stories/2011050858660300.htm
• http://www.sinlung.com/2011/07/assam-to-grow-cocoa-for-swiss-chocolate.html
• http://www.foodindustryindia.com/newfood/detailnews.jsp?n=Tamil+Nadu+Govt,+Cadbury+ink+pact+on+cocoa+farming&id=225
• http://blog.soliditytrade.com/the-impact-of-weather-events-on-cocoa-
production/• www.google.com
• www.wikipedia.com
• http://www.koffiecoalitie.nl