Cocoa prices to increase further

by Surekha Galagoda

The Department of Export Agriculture has started a new cocoa plantation in the Moneragala district to increase the extent of land under cocoa cultivation, said Director Meezan and Company (Pvt) Ltd S. Abdul Cader.

Cader who is also the Convenor Cocoa Sub committee (SAPPTA) said that as the local production is insufficient to meet the indigenous demand of the confectionery industry, they import cocoa beans and butter thereby draining our foreign exchange.

He said that if our large coconut plantations start growing cocoa as an intercrop it would result in an additional income for the industry and Sri Lanka could export cocoa beans. The Department of Export Agriculture provides free plants and advice to cocoa growers to increase cocoa cultivation.

Cocoa beans command a good price internationally due to the internal war in Ivory Coast and cocoa plants being damaged in Jakarta as a result of the tsunami.

The Ivory Coast which supplies 40% of cocoa beans to the world market cannot meet the demand due to the internal war which has pushed the price of cocoa beans to US$ 1500 per tonne during the last couple of years while it increased to US$ 2000 in November 2006. This has resulted in price increases locally as well to over Rs 150 per kg. The price increases have benefited the local as well as international producers.

He said that in Sri Lanka cocoa is mainly grown by small holders while a few large plantations too grow cocoa. As it is mainly a home garden crop no proper care is given to the plants which have resulted in a low yield. Cader said that in 2003 Sri Lanka was able to export 2-3 containers of cocoa beans to Germany while they exported one container in March.

In 2004 the production of cocoa was 600 metric tonnes while it increased to 900 metric tonnes in 2005, but as the demand was higher than the supply, the confectionery industry had to import cocoa beans and butter.

Cocoa is grown in the Matale and Kandy districts and recently in Moneragala. The cocoa crop starts in the last week of September. Growers obtain a high quantity of cocoa from October to December while a small quantity can be collected from time to time thereafter.

At present the No. 1 cocoa fetches Rs 165 a kilo while No.2 and 3 fetch Rs 160 and Rs 155 a kilo. It is graded according to the mouldy content. In the event there is a high percentage of mouldy confectionery manufacturers avoid buying it and it is classified as a lower grade.

Once the cocoa is plucked we buy, grade and supply the local chocolate producers while the excess produce is exported.

Speaking of the future, Cader said that there is a big demand for cocoa globally as Europeans and Americans consume much cocoa. Therefore there is a possibility for cocoa prices to increase further.

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