Abidjan, Ivory Coast: The International Cocoa Organisation (ICCO), the inter-governmental body representing the majority of the world's cocoa producers and consumers, sees major potential in the Indian market.
Michel Arrion, Executive Director of ICCO, which is celebrating its 50th anniversary, said traditional cocoa consuming countries of Europe and north America, which account for 70 percent of the consumption, have reached a saturation point, while consumption is increasing in emerging economies such as India. India is not yet a member of the ICCO.
According to him, cocoa consumption is growing in India, not in the chocolate industry, but due to the rising use of cocoa in dairy products and biscuits. ''The more you consume dairy products and biscuits, the more you will incorporate cocoa in them,'' he said to Moneycontrol.
Despite the presence of big brands such as Mars, Mondelez, Ferrero Rocher, and Nestle, consumption of chocolate bars has not picked up in India, he said.
China, too, has not become a big chocolate consumer. But like India, the use of cocoa as an ingredient in dairy products and biscuits is rising in China.
''About 15 years ago when they started consuming cocoa, we thought they would become major consumers, like it happened for wine and luxury goods,''' he said.
He added that Indonesia is a huge market and is a major player in cocoa grinding and processing, while Japan and South Korea are big consumers, comparable to western economies. Outside Asia, Brazil, Mexico, Russia, and Nigeria have become big cocoa markets.
He feels that India may not have become an ICCO member perhaps because cocoa is not a top priority for it, like Ivory Coast and Ghana, but he felt that growing more cocoa would be good for the farmers. ''You diversify risk when you grow several crops,'' he said.
Cocoa production in India grew 5 percent year-on-year (YoY) in 2022-23, to 29,792 tonnes. But the country's import of cocoa and cocoa preparations, chiefly cocoa powder, shot up by 16 percent to 1,28,654 tonnes for the year, per data of the Directorate of Cashewnut and Cocoa Development.
Arrion said that India should become an ICCO member as it is importing more cocoa products. ''We are ready to admit any country that produces even a tonne of cocoa. Besides, India has an embassy in Ivory Coast. Once you become a member, you become a part of the discussion. Agriculture plays an important role and we provide statistical information, economic analysis, and technical assistance,'' Arrion added.
ICCO represents both producers and consumers. It has 52 members, including 23 cocoa exporters and 29 cocoa importers, representing 86 percent and 72 percent of the global export and import industry, respectively.
He said that it is difficult to project global production and consumption trends for the 2023-24 marketing year, which stretches from October to September.
A slight reduction in production in Ivory Coast and Ghana saw a disproportionate increase in prices in 2022-23. '' We are not sure whether we will see that kind of volatility. We believe that prices will stabilise on the higher side,'' Arrion explained.
Cocoa prices currently hover around $3,500 per tonne. Though prices have risen in recent times, Arrion reckons it is lower than what it was about 50 years ago.
According to him, everyone makes a profit in the cocoa sector, except the farmers. ''Our main focus is the farmers and we believe the international prices are too low, because price discovery takes place in London and New York. We are in a value chain where supply exceeds demand, except last season. If you count inflation, cocoa prices are four times lower than what they were 50 years ago.''
On Saturday, Ivory Coast announced that the farmgate price for cocoa for the main season of 2023-24 (October-September) would be 1,000 CFA francs (Rs 133) per kg, about 11 percent higher than the previous year. In 2022-23, it was 900 CFA francs (Rs 120) per kg, 9 percent higher than the year before.
As the largest global producer of cocoa, the announcement is keenly looked at by the entire cocoa sector.
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