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Ten years ago, the international market price for a kilogram of dried cocoa nuts averaged around Rs 152 in Kerala. As of April, the price has soared to Rs 800. Farmers report that traders are now actively searching for even higher prices for Rs. This shows that cocoa is in high demand.
The next question is whether this remarkable profit-taking can continue. Experts in the field predict that the current record prices will not last long. The main reasons for the recent price hike are significant production declines in major cocoa producing countries and limited supply due to non-seasonal factors. Ivory Coast and Ghana, which account for 60% of the world’s cocoa production, are currently experiencing the negative effects of the El Niño phenomenon.
Due to rising humidity, cocoa farms in both countries are facing severe disease and pest attacks. The bean shortage has forced many large processing and manufacturing companies in these countries to close multiple plants. A similar situation prevails on cocoa farms in Cameroon and Nigeria. Prices are expected to be revised downward even after diseases and pests are controlled.
However, some analysts feel that the global situation is favorable for cocoa to get a “fair” price. Analysts say both short-term causes and long-term conditions will influence the future price of cocoa. For example, global warming threatens cocoa cultivation in Africa. The European Union has already imposed restrictions on cocoa, citing extensive deforestation before it can be grown. On the other hand, the world’s chocolate consumption is increasing year by year. The only source of pure chocolate is cacao, and no chemical substitute exists to date. Approximately 3,600 chemical reactions occur during the transformation of cacao into chocolate, including processes such as fermentation, drying, and roasting.
It’s also why companies like Cadbury are taking the lead in cocoa farming. Despite these efforts, cocoa beans are in short supply. Analysts predict that the gap between supply and demand is likely to widen in the coming years, making cocoa farming increasingly lucrative. For more than a decade, cocoa prices have remained stable. Historically, during the season, a farmer in Kerala used to receive between 45 and 65 rupees for his green cocoa. The price of dry cocoa was between Rs 165 and Rs 185. However, farmers are not completely satisfied with these prices. Farmers have not abandoned cocoa cultivation because it is primarily an intermediate crop and requires “manageable and minimal” labor and maintenance.
For small-scale farmers, the weekly income from cocoa cultivation is not important and is enough to run a household. Additionally, the fact that there has been no significant price decline is a motivator for farmers to continue farming. It operates on the premise that it is neither bad nor good. The new spike in cocoa prices came as a surprise to them. Farmers currently do not expect this high price “lottery” to continue indefinitely. Rather, they believe that their efforts are worth the stable price of around Rs 65 for green cocoa and Rs 250 for dry cocoa.
Although the current high cocoa prices are beneficial, many farmers are not in a position to fully reap the benefits. The price crash of the 1980s had a huge impact on many cocoa farmers, forcing them to abandon cacao cultivation. Floods in 2018 and increased invasion of wildlife, especially monkeys and squirrels in hilly areas, caused many farmers to abandon their crops.
When cocoa cultivation declined in Kerala, Andhra Pradesh recovered and became the leader. In addition to Thailand, the states of Tamil Nadu, Assam, and Meghalaya have also begun to focus heavily on cocoa cultivation. In the West Godavari region of Andhra Pradesh, cocoa cultivation is carried out on a large scale and in a highly scientific manner. On average, trees in Kerala produce about 2.5 kg of dry cocoa per year. Andhra Pradesh’s yield could be more than double that.
Despite high yields in Andhra Pradesh, the cocoa butter content of beans grown there tends to be low due to poor weather conditions. In contrast, due to intermittent rainfall and climatic conditions in the state, cocoa beans from the state are considered superior in terms of quality and flavor. This is why major chocolate companies prefer Kerala beans.
Cocoa is not a crop that can be matured in a hurry. It takes about 1.5 years to bear fruit, but it may take up to 4-5 years to reach optimal yield. Cocoa farming is therefore not suitable for those looking for a quick return on investment. In Kerala, cocoa is grown as an intermediate crop between coconut and arecanut. This pattern supports sustained production over long periods of time.
The current situation is giving new consideration to the inclusion of cocoa in mixed cropping systems. His Dr JS Minimol of the Cocoa Research Center at the Kerala Agricultural University suggests improving the neglected plantations to increase their production. She points out that many farms are not properly maintained according to a “good enough” approach and are not doing enough to achieve optimal productivity.
With proper care, you can significantly increase production levels in a short period of time. A mature cacao tree, if well cared for, can produce an average of 150 pods per year, with some trees producing twice that amount. The main production season is from April to July, but farms with proper irrigation and care can maintain good yields all year round. These farms utilize trees that have been genetically enhanced to better adapt to the local climate and effectively resist diseases and pests.
Chocolate consumption in India is quite low compared to other regions. For example, the average Russian consumes around 9.08 kg of chocolate per year, followed closely by the British. In stark contrast, the average Indian consumes only about 0.20 kg per year. This has been a key factor attracting major chocolate companies such as Cadbury and Nestlé to the Indian market in anticipation of potential growth in demand. With the gradual shift from traditional sweets to chocolate in India, these companies foresee a more profitable future in the Indian confectionery market.
Even during the coronavirus pandemic, the country’s chocolate industry is showing growth. While large companies such as Cadbury and Nestlé hold a large share of the Indian market, there are also small entrepreneurs. These small businesses source cocoa directly from farms, especially in the state of Kerala, and produce high quality premium chocolates. They import advanced machinery from countries such as Italy to enhance production. Moreover, these small units don’t just produce plain chocolate. They are innovating by replacing cocoa butter with vegetable fats and other ingredients.
For knowledge and expertise in cocoa cultivation, processing and chocolate production, you can contact the Cocoa Research Center of the Kerala Agricultural University in Vellanikkara. The center actively offers structured training sessions for entrepreneurs at a nominal fee. Anyone who wants to start a chocolate making venture needs to master both the art and science of chocolate making. The center provides guidance in all stages of cocoa cultivation and processing, including harvesting, fermentation, and drying. It also develops the technical know-how to produce products such as cookies from cocoa. The phone number is 0487-2438451.
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