Cocoa Sector Analysis Ver 2.0

8/10/2019 Cocoa Sector Analysis Ver 2.0

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Cocoa Sectoral Analysis

Kamal Raju Gotte 24B

Rajesh A. Jaddu 38B

Shreyash Agarwal 42C



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.



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



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.



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



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



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



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)



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





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



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



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


Global Importers of Cocoa



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


India’s Imports of Cocoa



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



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



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.



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



Cocoa Value Chain

Cocoa Products



Chocolate Industry





Cocoa Supply Chain



Price & Production Trends• Although there is a declining trend in real cocoa prices

• Real chocolate prices have been maintained



•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



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



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



Supply Drivers for Cocoa

SUPPLYCOCOA

AFFECTS

NATURALPOLLINATION

WEATHER

CONDITIONS

CLIMATE

SHIFTS

FLUCTUATING

PRICES

CONCENTRATED

SUPPLY

SUSTAINABILITY

GEOPOLITICAL

TENSIONS



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



Cocoa Balance Sheet

O tl k



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



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



Thank You

Documents

Cocoa Sector Analysis Ver 2.0