Cocoa prices up on global shortage.

Kochi: Cocoa prices are on a roll with chocolate makers scrambling for Indian cocoa in the wake of lower global production. Despite estimates of higher production, the Indian cocoa market has firmed up quite a bit making it impossible for exporters to procure cocoa.

Indian cocoa prices are now at a premium of more than 12-15% compared to the global markets. Dry beans have fetched Rs 175 per kg while wet beans are selling at around Rs 55 per kg in Kerala, which means that returns have more than doubled in just two years.

Meanwhile, according to the Kochi-based Directorate of Cashew and Cocoa Development (DACCD) estimates, India production during 2010 would be higher by 3-4% around 12,300 tonne. India imports some cocoa for its growing domestic market.

“Shortage of cocoa in global markets is not only pushing prices upwards, but also leading to a scramble for the commodity in the global markets,” Venkatesh N Hubballi, director of DACCD told FE.

Production in Ivory Coast and Ghana are reported to be lower, he added.

Reports say that cocoa futures rose to a seven-week high in New York on Tuesday as heavy rains threatened crops in Africa, including Ivory Coast, the world’s largest grower and exporter of cocoa.

The carryover stock in the country is also seen lower due to lower imports during the last fiscal. Imports during 2009-10 were lower by 8-10% as compared to the previous financial year which saw imports of 19,000 tonne of cocoa products.

Exports of Indian cocoa are mostly done by the organic and fair trade organisations that have fairly long-term contracts. Shiny George of Indian Organic Farmers Company says that her company has stopped exports due to high domestic prices.

Her company has a contract with a Switzerland company named Chocolate Stella SA to export 100 tonne of organic cocoa annually. “Good demand for cocoa has seen the domestic market firm up. The number of buyers is increasing every season,” she added.

Source : Financial Express