COPAL COCOA Info

COPAL COPAL COCOACOCOA Info Info A Weekly Newsletter of Cocoa Producers' Alliance th th Issue No. 527 14 – 18 January 2013 r

e t e t c e l n s a i l w l e A

N ' s a r e o c c u o d C o r P e

s a u o o c o H

- Do your health a favour, drink Cocoa everyday C

n ‘It’s nature’s miracle food’ I

 ICCOINSIDE DAILY COCOA THIS PRICESISSE: UP-COMING EVENTS  LONDON (LIFFE)IN FUTURES THIS ISSUE MARKET UPDATE  NEW YORK (ICE) FUTURES MARKET UPDATE  FROM THE NEWS MEDIA In the News (from Newspapers worldwide) Health and Nutrition Labour Issues  

Production and Quality Environmental Issue  Indonesia's cocoa output seen falling   Indonesia's cocoa output to rise Research & Development The Market   Ghana cocoa purchases hit 485,234 tonnes by Jan. 3 Promotion & Consumption  Processing and Manufacturing  Cocoa Butter stabilizes in Europe as Grinders Others Boost Processing  NIGERIA: Cocoa stakeholders on collision path  Cocoa butter ratios reach four-year high over calls for ban

Business & Economy  Shareholders approve FTN Cocoa’s merger plans

ICCO Daily Cocoa Prices

ICCO Daily Price ICCO Daily Price London futures New York futures (SDR/tonne) ($US/tonne) (£/tonne) ($US/tonne)

14th January 1497.99 2305.63 1455.33 2274

15th January 1501.48 2311.71 1459.33 2276.67

16th January 1494.63 2299.05 1458.67 2264.67

17th January 1520.71 2339.79 1484.67 2307.67

18th January 1512.04 2323.3 1483.33 2293.67

Average 1505.00 2316.00 1468.00 2283.00

COCOA PRODUCERS’ ALLIANCE, NATIONAL ASSEMBLY COMPLEX TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234(0)1-263-5574 FAX: +234(0)1-263-5684 2 Email: [email protected] Website: www.copal-cpa.org International Financial Futures and Options Exchange (LIFFE) London Futures Market – Summary of Trading Activities (£ per tone)

Monday 14th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 1435 1451 13 1465S 1430 11,767 May 2013 1444 1454 9 1468S 1438 7,528 Jul 2013 1450 1461 8 1476S 1445S 3,098 Sep 2013 1456 1469 8 1485S 1455S 2,051 Dec 2013 1459 1468 7 1484S 1457S 736 Mar 2014 1458 1462 6 1469S 1454S 187 May 2014 1461 1467 5 1475S 1461S 17 Jul 2014 1466 1472 5 1477S 1466 29 Sep 2014 1487 1479 5 1487S 1487S 8 Dec 2014 1497 1489 4 1497S 1497S 8 Average/Totals 1467 25,429

Tuesday 15th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 1438 1455 4 1465 1436 9,744 May 2013 1440 1458 4 1468 1440 3,277 Jul 2013 1452 1465 4 1473S 1448S 1,326 Sep 2013 1456 1472 3 1478S 1456 1,765 Dec 2013 1453 1470 2 1474S 1453 794 Mar 2014 1448 1463 1 1472S 1448S 1,582 May 2014 1467 1467 0 1475S 1460 165 Jul 2014 1480 1472 0 1480S 1467 9 Sep 2014 1479 0 0 Dec 2014 1489 0 0 Average/Totals 1469 18,662

Wednesday 16th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 1449 1455 0 1459 1448 5,472 May 2013 1454 1457 -1 1460 1451S 2,066 Jul 2013 1460 1464 -1 1467S 1458S 945 Sep 2013 1468 1471 -1 1474S 1465 1,202 Dec 2013 1467 1468 -2 1470S 1463S 486 Mar 2014 1462 1462 -1 1462S 1457S 36 May 2014 1460 1466 -1 1460 1460 20 Jul 2014 1471 -1 0 Sep 2014 1478 -1 0 Dec 2014 1488 -1 0 Average/Totals 1468 10,227

Thursday 17th January 2013

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 3 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Month Opening Trans Settle Change High Low Volume Mar 2013 1465 1489 34 1492S 1460 15,001 May 2013 1465 1481 24 1486S 1461 9,956 Jul 2013 1470 1484 20 1490S 1466 3,920 Sep 2013 1479 1491 20 1497S 1472S 1,998 Dec 2013 1474 1490 22 1495S 1470S 1,582 Mar 2014 1473 1484 22 1487S 1465S 658 May 2014 1491 1488 22 1491 1491 5 Jul 2014 1494 1493 22 1494S 1494S 4 Sep 2014 1500 22 0 Dec 2014 1510 22 0 Average/Totals 1491 33,124

Friday 18th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 1497 1482 -7 1499 1477 6,209 May 2013 1489 1481 0 1490S 1474 5,619 Jul 2013 1491 1487 3 1493S 1477S 3,664 Sep 2013 1498 1492 1 1500S 1484S 2,345 Dec 2013 1499 1492 2 1499S 1481S 877 Mar 2014 1491 1487 3 1492S 1479S 414 May 2014 1485 1491 3 1491S 1485 15 Jul 2014 1491 1496 3 1491 1491 7 Sep 2014 1503 3 0 Dec 2014 1513 3 0 Average/Totals 1494 12,941

Average for the week 1494 2588 2588

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 4 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org New York Board of Trade (New York Futures Market – Summary of Trading Activities) (US$ per tone)

Monday 14th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 2256 2267 11 2296 2230 18,940 May 2013 2265 2274 9 2302 2241 7,773 Jul 2013 2273 2282 7 2309 2269 2,045 Sep 2013 2264 2289 6 2315 2264 1,277 Dec 2013 2274 2293 4 2317 2270 935 Mar 2014 2296 2296 0 2320 2282 961 May 2014 2302 2302 0 2307 2302 294 Jul 2014 0 2308 0 0 0 2 Sep 2014 0 2311 0 0 0 0 Dec 2014 0 2311 0 0 0 0 Average/Totals 2293 32,227

Tuesday 15th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 2254 2270 3 2285 2232 14,133 May 2013 2260 2277 3 2289 2240 4,043 Jul 2013 2262 2287 5 2295 2250 1,327 Sep 2013 2270 2296 7 2301 2261 892 Dec 2013 2282 2300 7 2299 2271 305 Mar 2014 2285 2304 8 2290 2269 93 May 2014 0 2310 8 0 0 20 Jul 2014 0 2317 9 0 0 0 Sep 2014 0 2320 9 0 0 0 Dec 2014 0 2320 9 0 0 0 Average/Totals 2300 20,813

Wednesday 16thJanuary 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 2250 2256 -14 2268 2244 6,845 May 2013 2265 2265 -12 2277 2253 2,214 Jul 2013 2277 2274 -13 2284 2265 801 Sep 2013 2289 2283 -13 2289 2273 1,116 Dec 2013 2285 2287 -13 2294 2280 224 Mar 2014 2294 2291 -13 2298 2292 201 May 2014 0 2297 -13 0 0 0 Jul 2014 2308 2304 -13 2312 2308 59 Sep 2014 0 2308 -12 0 0 0 Dec 2014 0 2308 -12 0 0 0 Average/Totals 2287 11,460

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 5 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Thursday 17th January 2013 Month Opening Trans Settle Change High Low Volume Mar 2013 2255 2300 44 2310 2250 16,397 May 2013 2265 2308 43 2317 2259 4,371 Jul 2013 2287 2316 42 2321 2286 2,088 Sep 2013 2283 2323 40 2330 2283 1,615 Dec 2013 2309 2326 39 2333 2301 532 Mar 2014 2312 2329 38 2333 2307 415 May 2014 0 2335 38 0 0 14 Jul 2014 0 2342 38 0 0 0 Sep 2014 0 2345 37 0 0 0 Dec 2014 0 2345 37 0 0 0 Average/Totals 2327 25,432

Friday 18th January 2014 Month Opening Trans Settle Change High Low Volume Mar 2013 2296 2285 -15 2313 2277 10,001 May 2013 2304 2294 -14 2320 2285 4,277 Jul 2013 2312 2304 -12 2328 2295 2,300 Sep 2013 2328 2313 -10 2332 2305 3,337 Dec 2013 2328 2316 -10 2328 2310 725 Mar 2014 2336 2321 -8 2338 2314 298 May 2014 0 2327 -8 0 0 0 Jul 2014 0 2334 -8 0 0 0 Sep 2014 0 2337 -8 0 0 0 Dec 2014 0 2337 -8 0 0 0 Average/Totals 2317 20,938

Average for the week 2317 3807 3807

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 6 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org NewsNEWS

Health and Nutrition

Production & Quality

Indonesia's cocoa output seen falling Business Recorder (blog) January 13, 2011 Cocoa output in Indonesia could fall 5 percent this year, industry sources said on Wednesday, after the weather agency in the world's third-largest producer said rains would continue through June. Indonesia's weather agency forecast at a news conference on Wednesday that the dry season is likely to start in most areas only in July.

The country's dry season normally runs from April to September/October. A wetter-than-expected rainy season has already affected its plantation crops and could hit exploitation of coal and other resources. "When we say dry, it's not completely dry. It means rain intensity is easing," said Sri Woro, of the meteorological office.

She said that if La Nina continues until June as predicted, Indonesia would experience another "wet" dry season.

"It is a bit extreme, the weather, so of course there will be an impact to the cocoa," said Dakhri Sanusi, secretary general of the Indonesian Cocoa Association. "It is very wet (and) can reduce the production," Sanusi added. "It will be down (in 2011) - production may be less by about 5 percent."

Late last year, Indonesia was forecast to produce 500,000 tonnes of cocoa beans in 2010, down from 550,000 tonnes in 2009, the Indonesian Cocoa Association said. Extreme weather and heavy rain caused by La Nina has hit the archipelago, disrupting agriculture and mining, including tin and sugar, helping push up global prices. The unusually long rainy season has wreaked havoc on most of the country's plantation crops, tightening supply to global markets and driving up palm oil prices to near three-year highs.

Indonesia's cocoa output to rise Business Recorder (blog January 16, 2013 Cocoa production in Indonesia, the world's third largest producer, could rise by as much as 11 percent in 2013 from last year due to better farming techniques, an industry body said, although recent wet weather will delay harvests. Dakhri Sanusi, secretary general at the Indonesian Cocoa Association (Askindo), told Reuters that 2013 output would be from 450,000 to 500,000 tonnes, versus 450,000 tonnes in 2012.

"Heavy rain and flooding will ... cause a delay in the cocoa bean harvest because currently some cocoa trees are flowering," he said. Large parts of the archipelago have been hit by flooding in the last few weeks as the rainy season peaks. The harvest of the main cocoa crop in Indonesia usually starts in April and peaks in July and August, before a smaller harvest, widely known as the mid-crop, begins in October or November.

The main crop may now start in June or July, Sanusi said, adding that cocoa bean exports for 2013 would drop to 100,000 tonnes from 130,000 tonnes the year before as domestic grinding capacity grows. Any rise in output for 2013 will be due to efforts by both by the government and farmers to increase cocoa bean output through better farming techniques and using better seeds, fertiliser and disease controls, he added.

Indonesia, the third-biggest producer after Ivory Coast and Ghana, has struggled to increase cocoa production in recent years as its ageing trees, most of them planted in the 1980s, are vulnerable to disease that is hard to stamp

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 7 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org out because of a vast network of smallholders. At the same time, Indonesian cocoa grinders and major overseas investors have spotted the potential in Asia and are expanding rapidly.

The country is attracting companies such as US agribusiness giant Cargill and Barry Callebaut , the world's top chocolate maker, which plan to invest almost $150 million in cocoa grinding plants in Sulawesi. Indonesia is also the world's third-largest coffee producer, with output expected to be flat at between 650,000-700,000 tonnes this year, according to the Association of Indonesian Coffee Exporters and Industries (AEKI).

Sumatra province accounts for the lion's share of overall output, with Indonesia's main coffee harvest from March until August, with a smaller crop between September and January. Despite the heavy rains, officials at AEKI re-affirmed their production estimate for 2013 on Tuesday and said that they hadn't had any wet weather problems so far.

The Market

Ghana cocoa purchases hit 485,234 tonnes by Jan. 3 By Shoaib-ur-Rehman Siddiqui 16 January 2013

ACCRA: Ghana's cocoa main crop purchases reached 485,234 tonnes by Jan. 3 since the season started Oct. 12, down 18.9 percent compared with the same period last year, data from industry regulator Cocobod showed on Wednesday.

Total purchases for week twelve ending Jan. 3 were 36,900 tonnes, up from 26,749 tonnes declared in the week before, according to the data.

Ghana, the world's second-largest cocoa grower after Ivory Coast, has projected a harvest of around 800,000 tonnes this season, down 5 percent on last year.

Processing & Manufacturing

Cocoa Butter stabilizes in Europe as Grinders Boost Processing Bloomberg By Isis Almeida at [email protected] Jan 17, 2013 The price of cocoa butter, which gained 65 percent last year, stabilized in Europe in the past two weeks as bean processors began boosting output after a slowdown last year, according to three traders who have direct knowledge of the sales.

The cost of cocoa butter relative to the price of beans, or the so-called butter ratio, was 2.05 to 2.1 times the cocoa futures on the NYSE Liffe exchange, said the traders, who asked not to be identified because they aren’t authorized to speak to the media. The ratio was 2 to 2.1 on Jan. 4.

Cocoa butter rallied last year as grinders slowed bean processing after a drop in the price of by-product cocoa powder reduced their profitability. The butter ratio was 2 on Dec. 28, 2012, up from 1.21 on Dec. 30, 2011, according to data from KnowledgeCharts, a unit of research company Commodities Risk Analysis in Bethlehem, Pennsylvania.

Delfi Cocoa (Europe) GmbH is increasing processing at its Hamburg plant after a six-month slowdown, Karel Menu, the company’s managing director, said on Jan. 7. Cargill Inc. has started to increase grindings after cut backs last year, Jos de Loor, president of the cocoa and chocolate unit, said Nov. 21.

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 8 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Cocoa bean processing in Europe fell 6.2 percent in the fourth quarter, the Brussels-based European Cocoa Association said this week. That compared with a 16 percent decline in the previous three-month period and an 18 percent drop from April to June, ECA data showed.

When cocoa beans are ground, about 80 percent is turned into cocoa liquor, which is then processed into powder and butter, according to Barry Callebaut AG (BARN), which supplies chocolate to Nestle SA. (NESN) Grinders’ profitability is determined by the prices of powder and butter divided by that of beans, giving the so- called combined ratio.

Cocoa for March delivery rose 0.4 percent to 1,461 pounds ($2,340) a ton on NYSE Liffe.

Cocoa butter ratios reach four-year high AgraNet (subscription) January 18 2013 COCOA butter changed hands at its highest ratios in nearly four years as consumers chased the commodity ahead of Valentine's Day and Easter celebrations, while demand from the Middle East lifted powder prices, dealers said on Friday.

Butter ratios were steady at 1.90 times London futures for nearby shipment, their highest since around April 2009, when ratios stood at about 2.0 times futures. Ratios were quoted at 1.05 times in January last year.

Business & Economy

Shareholders approve FTN Cocoa’s merger plans The Guardian Nigeria By Mmedaramfon Umoren Business Services - Business News 14 January 2013 FOLLOWING the approval by its shareholders of FTN Cocoa Processors Plc may form a strategic alliance with some foreign cocoa processing firms in order to aid its business growth as well as profitability.

Specifically, the company has signed a five-year memorandum of understanding towards a strategic partnership with Transmar Group of America, one of the global players in the cocoa products industry as an off-taker in the international market.

Speaking at the company’s yearly general meeting in Lagos, recently, the Chairman of the company, Chief Olusola Oguntimehin noted that the partnership would aid the company’s realisation of its objectives and help it meet conditions set by the African Export-Import Bank limited (AFREXIMBANK) to assess its credit facility.

He said: “FTN Cocoa Processors Plc and CONCAFF, another cocoa processing company in Cote d’Ivoire, were selected by the African Export-Import Bank limited (AFREXIMBANK), Cairo, Egypt to pioneer its African Cocoa initiative (AFRICOIN), which is designed to develop cocoa industry in Africa. This is aimed at helping origin country’s cocoa processors in Africa to operate in collaboration with off-takers in the international market. This has strengthened their willingness to support funding of FTN.”

Commenting on the company’s result for the 2011 financial year, Oguntimehin noted that the company hopes to return to profitability in 2012, going by the recent expansion in capacity as well as partnership with other companies.

“ The future looks bright and promising for all stakeholders. It is our hope that the result of the various installations carried out in the year under review will start to reflect from the latter part of the year 2012. I therefore like to solicit your further support, patience and commitment towards profitability and success of our company”, he added. Labour Issues

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 9 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Environmental Issues

Research & Development

Promotion & Consumption

Others

NIGERIA: Cocoa stakeholders on collision path over calls for ban Codewit Global Network By Dayo Johnson Akure 17 January 2013 National President, Cocoa Association of Nigeria (CAN), Mr. Sayina Robinson Riman, has picked holes in the call for a ban on the export of cocoa beans from Nigeria by the Cocoa Processors Association of Nigeria (COPAN) Riman said it was “wrong for COPAN to have expressed its view on the pages newspapers, since such could be done through CAN, which is the umbrella association of all professional and interest groups in the cocoa value chain.

He therefore frowned at the option taken by COPAN chairman Mr. Oladimeji Owofemi.

According to him the “suggestions about placing a ban on export of cocoa beans would send the wrong signals to government and the international community.

While noting the huge investments in setting up cocoa processing plants, cost of running the factories profitably and the challenge of infrastructure failure, CAN noted that “ the position taken by the processors smacked of selfishness and intolerance.

Riman pointed out that each link in the cocoa value chain was as valuable as the other and none may undermine the relevance of any other.

He noted that farmers, traders, input providers, researchers, warehouse and collateral managers, exporters, processors, transporters were all important to the sector.

He noted that “a similar attempt to ban export of cocoa beans in 1992, also championed by a group of cocoa processors, led to farmers abandoning cocoa farms and destruction of many farms.

He said that the position being canvassed by the processors was alien to the spirit of free enterprise, adding none of cocoa producing countries like Ghana, Cote d’Ivoire, Cameroun bans export of cocoa beans.

Riman urged the cocoa processors to look inward and look for more creative ways to solve their challenges instead of coming up with suggestions that could cause ripples and upset the stabilizing cocoa economy in Nigeria.

He also advised to take advantage of the cocoa transformation agenda of the federal government to embark on backward integration to overcome their supply challenges.

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 10 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Chairman of the Ondo State Farmers Congress, Joshua Oyedele, stated that the processors were misguided in their suggestion, adding that any attempt to ban cocoa bean export would be resisted by farmers.

Oyedele said that the move by processors was retrogressive, anti-people and affects the economy of the country negatively.

ALLIANCE OF COCOA PRODUCING COUNTRIES, NATIONAL ASSEMBLY COMPLEX, TAFAWA BALEWA SQUARE, P.O. BOX 1718, LAGOS, NIGERIA. TEL: +234-70-9814-1735; +234-70-9814-1736; 11 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org