World's top cocoa producer Ivory Coast targets Indian market to reduce dependence on Europe: Report
New Delhi: World's top cocoa producer Ivory Coast is strategizing to reduce its reliance on Europe and bolster its cocoa industry. India, though not a major cocoa producer, is a key player in this plan, primarily importing beans to meet domestic demand, Moneycontrol reported.
Despite its substantial global cocoa output the African nation has limited control over pricing, which is determined in New York and London.
Environmental regulations have also impacted cultivation areas. Now, Ivory Coast aims to tap into the Indian market, which has significant demand for chocolates, to enhance the livelihoods of its cocoa farmers.
Currently, it channels cocoa through intermediaries to large chocolate companies in Europe and the US, often disadvantaging farmers.
The country is now exploring direct sales of cocoa and its products in Asian markets, with a focus on India, said the report
"We want to sell our cocoa and finished products in India. We have cocoa and Indians have the market. It will be a win-win situation," said Siaka Minayaha, Chairman of the Board of Directors, and Yves Brahima Kone, Managing Director, of the Coffee and Cocoa Council, the regulator of the two products in Ivory Coast, according to Moneycontrol.
A delegation from the council will visit India in November to engage with cocoa processors and producers for direct sales of their products.
It will also hold discussions with government officials regarding trade matters, including the import duty on cocoa beans.
An important issue for the Indian cocoa processing industry is the existing duty structure, which imposes a high duty on beans but allows duty-free import of finished cocoa products from certain ASEAN countries due to free trade agreements, the report said.
Ivory Coast had originally aimed to increase the value addition in cocoa from 40 to 50 percent by 2020, targeting a production of 1.5 million tonnes.
However, due to the pandemic, production has surged to 2.2 million tonnes.
The Society for Transformation of Cocoa (Ivory Coast), an advocate for cocoa product manufacturing, has already taken steps towards cocoa processing in the country.
It produces 30,000 tonnes of cocoa liquor, along with 10,000 tonnes each of cocoa powder and cocoa butter annually, aiming to enhance value addition, said the report.
The country is in the process of expanding capacity through two new projects, each with a capacity of 50,000 tonnes, at an investment of 300 million euros, with assistance from China, it added.
Konan Theodore, the General Manager of the Society, said that China will provide 85 percent of the funding for the projects through a loan, while the Ivory Coast government will cover the remaining 15 percent.
As per the agreement, China will receive a 40 percent share of the project's output for a period of 15 years, Moneycontrol reported.
To address an oversupply issue, Ivory Coast has set a cap of 2.2 million tonnes on its cocoa production.
However, in the 2022-23 period (from October to September), global cocoa prices surged by over 45 percent year-on-year, reaching approximately $3,600-3,500 per tonne.
This increase was attributed to heavy rain and floods in Ivory Coast, which resulted in a production decline.
The country is also looking at a joint venture with India. "Indians are used to eating chocolates by big companies. They will get a taste of our chocolates when we sell it in the Indian market," Theodore told Moneycontrol.
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