Whilst the adverse impact of global warming on rainfall and cropping patterns in India is a matter of growing concern, it seems that there might a silver lining in all of this. As the price of cocoa beans rises, it is becoming increasingly viable – in fact, lucrative – to grow cocoa beans in India and sell it to domestic chocolate makers (demand for whose product are rising at 15% per annum). Priti Gupta says in this article that: “Despite having several regions with weather conditions suitable for cocoa trees, India only accounts for 1% of the world’s cocoa bean production.
Global production is currently dominated by West Africa, where Côte d’Ivoire and Ghana between them produce more than half of the world’s annual output.
Indian growers can only supply a quarter of the beans needed by Indian makers of chocolate and other confectionary.”
However, growing cocoa that can be used to make chocolates isn’t as easy as it sounds. There is a lot of skill involved, skill that the Indian farmers do not as yet possess: “”The challenge is that it is grown in very fragmented small holdings, so it does not get the kind of attention cocoa should get,” says Renny Jacob, chairman of India Cocoa, a private company that has been growing and processing cocoa beans for more than 30 years.
In particular he says that Indian farmers are poor at handling beans after they have been harvested. Once removed from their pods, beans go through a fermentation process at the farm, which can make a huge difference to their flavour.
“Cocoa fermentation is a critical process in the production of chocolate, transforming raw cocoa beans into a form suitable for chocolate making,” says Sarin Partrick, chief executive of India Cocoa.
“This complex process involves several stages and the activity of various micro-organisms, which help develop the beans’ flavour, aroma, and colour,” he says.”
However, help is on hand – both from the government and from the corporate sector which has an obvious vested interest in sourcing cocoa beans locally – and the reslt so far are very encouraging: “To raise the quantity and quality of cocoa bean production, the government has introduced several initiatives.
It is investing in schemes to develop hybrid cocoa plants, that are more productive than existing varieties.
In addition there are schemes to train farmers on the latest techniques for growing and processing beans.
“There is a vast opportunity for Indian farmers to enter into cocoa cultivation and avail the benefits,” says Dr Femina, who works in the government department tasked with developing cocoa production.
Business is also investing in new cocoa tree vareities.
Dr Minimol J.S., is the head of cocoa research at Kerala Agriculture University and is working with Cadbury to develop hybrid cocoa trees.
In the project’s orchard existing high-performing varieties are cross-bred with exotic species.
So far the programme has come up with 15 new varieties.
“These are India’s first hybrid, disease-resistant seeds,” she says.
“The seeds are drought tolerant varieties, and have withstood temperatures of even 40C, which is usually not possible,” she adds.
The hybrids are also much more productive than traditional varieties.
“The global average production is 0.25 kilogram per year per tree.
“In Kerala, we get 2.5 kilograms per year per tree. In Andhra and Telangana, we are even getting a yield of four or five kilograms per tree per year,” she says.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
