The big chocolate meltdown | Why 2024 cocoa prices are driving people nuts

Sub: Geography

Sec: Eco geo

Impact of Soaring Cocoa Prices on Indian Pâtisseries and Bakers

Rising Cocoa Prices:
- Global cocoa prices have increased by 110% to 200%.
- Cacao bean prices reached a record $12,000 per tonne in April.
- A combination of El Niño, black pod disease, ageing cacao trees, and inequitable market practices in Ghana and Ivory Coast has contributed to the price hike.
- Predictions indicate cocoa futures could climb to $20,000 per tonne.
Operational Challenges:
- Importers face increased cargo prices due to the West Asia crisis and a weakened rupee (down 10%-12%).
- Prices of imported chocolate brands like Valrhona, Callebaut, and Van Houten have surged by 50%, with potential increases up to 100% by October.
- Supply chain adjustments take 5-6 months to reflect price changes in India.

About Cocoa Bean:

Also known as cacao, it is the dried, fermented seed of Theobroma cacao, the cacao tree.
Native to the Amazon rainforest, first domesticated 5,300 years ago by the Mayo-Chinchipe culture in South America, later introduced to Mesoamerica.
Tree Lifecycle
- Growth: Takes five years to mature.
- Lifespan: Typically around 100 years.
Varieties of Cocoa Plant
- Forastero: Most widely used.
- Criollo: Known for its superior flavour.
- Trinitario: A hybrid of Forastero and Criollo.
Nutritional Components
- Phytochemicals: Contains flavanols, procyanidins, and flavonoids; may have a blood pressure-lowering effect.
- Other Compounds: Contains theobromine and small amounts of caffeine.

Historical and Cultural Significance:

Mesoamerica: Used in spiritual ceremonies and as currency.
Geographical Zone: Grows in limited areas; West Africa produces nearly 81% of the world’s cocoa.

Processing and Products:

Chocolate Production:
- 1 kg of chocolate requires 300-600 cocoa beans.
- Beans are roasted, cracked, deshelled into nibs, and then ground into chocolate liquor.
- Chocolate liquor is mixed with cocoa butter, sugar, and sometimes vanilla and lecithin to make chocolate.
- Cocoa powder and butter are separated using a hydraulic press or Broma process.
- Dutch process cocoa is treated with alkali for a different flavour.
- Roasting affects flavour and can be done on whole beans or nibs.

Production and Trade

Global Production (2020): 5.8 million tonnes.
Leading Producers: Ivory Coast (Or Côte d’Ivoire) (38%), followed by Ghana and Indonesia.
Futures Markets: London (West African cocoa) and New York (Southeast Asian cocoa).
Sustainability Initiatives: Swiss Platform for Sustainable Cocoa (SWISSCO), the German Initiative on Sustainable Cocoa (GISCO), and Belgium’s Beyond Chocolate.
29% of global production met voluntary sustainability standards in 2016.
Deforestation: A major concern, especially in West Africa. Agroforestry practices support sustainable production.
Economic Impact
- Significance: Critical to economies such as Nigeria’s.
- Demand: Growing at over 3% annually since 2008.

Cocoa in India:

Production: In India Cocoa is being cultivated in the States of Kerala, Karnataka, Andhra Pradesh and Tamil Nadu.
Andhra Pradesh ranks first in area, production and productivity.
The average productivity of cocoa in India is 669 Kg/ha.
Export: Cocoa is an export-oriented commodity.
- India earns foreign exchange worth Rs. 1108cores through exports of cocoa beans and its products.
- India is the 59th largest exporter of Cocoa Beans in the world. India exports it to Malaysia, Indonesia and the U.K. among others.
Import: India is the 17th largest importer of Cocoa Beans in the world.
- The current domestic production of cocoa beans is not sufficient to meet the demand of the industry. Hence India is importing a lion’s share of its requirement from other cocoa-growing countries worth Rs.2021crores.
- India imports it mainly from the Democratic Republic of the Congo, the Dominican Republic, and Uganda.

Source: TH