India to Become Cocoa Production Hub of the Region

Rising demand from the recession proof India for chocolates is forcing leading manufacturers to look within the country for cocoa sourcing to avoid 30 percent import duty and rising transportation cost. Cadbury, the leading UK-based chocolate producers claimed that India was proving to be one of its most resilient markets, with profit continuing to grow at about 20 percent a year, and sales at 30 percent despite global downturn.

A major chunk of Indian chocolate market is ruled by Cadbury and it enjoys holding more than 70 percent of market share. Nestle, the Swiss leaders in packaged food with 25 percent share is the only other major competitor for Cadbury in India.

Cadbury India’s Cocoa Department produces over 2.5mn hybrid seedlings annually and distributes it among farmers. India as compared to other cocoa growing countries, its farmers use cocoa as an inter-crop between areca nut and coconut trees.

Cadbury believes that it can persuade 20 per cent of Indian farmers to plant cocoa and thereby bring more acreage under cocoa plantation. The co-ordination with the farmers and producers is expected to increase country’s production of the beans from 10,000 tons to ambitious 150,000 tons per year or 3 per cent of global production by 2020.

India’s Cocoa Development board is also understood to have undertaken a similar initiative to increase the production to 16,000 tons in two years’ time. India’s annual consumption of the beans is about 18,000 tons, and more than 40 percent of its total requirement is still met through imports.

India’s import of cocoa beans and cocoa products in 2007-08 fiscal has increased by four-fold at about 8,000 tons, the same was just 2,000 tons in the beginning of the decade. According to Cadbury’s India forecast, cocoa demand is growing around 15 percent annually and will reach about 30,000 tons in the next 5 years. Industry observers said India through public-private partnership was attempting a cocoa revolution once again in the country to become a bellwether state of the beans in the region.

By Jose Roy