The big chocolate meltdown | Why 2024 cocoa prices are driving people nuts
- June 9, 2024
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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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