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COPAL COPAL COCOACOCOA InfoInfo

A Weekly Newsletter of Cocoa Producers' Alliance th th Issue No. 490 30 April – 4 May 2012 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

o Meeting of the InternationalUP-COMING Organizing CommitteeEVENTS for the  ICCOINSIDE DAILY COCOA THISIN THIS PRICESISSE: ISSUE th 17 International Cocoa Research Conference, (ICRC)  LONDON (LIFFE) FUTURES th rd Yaounde, Cameroon, 24 April to 3 May 2012. MARKET UPDATE  NEW YORK (ICE) FUTURES MARKET UPDATE  FROM THE NEWS MEDIA In the News (from Newspapers worldwide) Health and Nutrition Business & Economy  Choose dark chocolate for health benefits  Ivorian uncertainty weighs on cocoa industry

Production and Quality Labour Issues  Fazer develops traceability of cocoa   U.S. anti-cocaine push embitters Peru chocolate makers Environmental Issue  Africa: World Cocoa Foundation and USDA  announce Borlaug and Cochran Global Cocoa Fellowship Research & Development  Cocoa growers fault FG on agric budget   Nigeria slides in cocoa production by 20% - Association  Armajaro invests $1 Million to boost Ecuador’s Promotion & Consumption Fine Cocoa 

The Market Others  Sulawesi cocoa exports more than double  World Bank to buy cocoa trading stake

Processing and Manufacturing  Ivorian cocoa prices up on grinders, local demand

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

30th April 1491.89 2313.24 1480.00 2228.00

1st May 1543.24 2395.17 1520.33 2327.33

2nd May 1568.32 2424.44 1543.33 2352.00

3rd May 1538.68 2378.42 1517.33 2304.00

4th May 1530.77 2366.47 1511.67 2295.00

Average 1535.00 2376.00 1515.00 2301.00

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 30th April 2012 Month Opening Trans Settle Change High Low Volume May 2012 1518 1472 -43 1526 1441S 4,588 Jul 2012 1532 1493 -38 1546S 1457 12,457 Sep 2012 1520 1480 -39 1529S 1445S 3,638 Dec 2012 1503 1467 -38 1513S 1430 2,501 Mar 2013 1476 1445 -32 1486S 1409S 2,254 May 2013 1476 1445 -29 1481S 1414S 612 Jul 2013 1479 1448 -29 1483S 1423S 159 Sep 2013 1425 1453 -30 1450 1420 274 Dec 2013 1461 -26 0 Dec 2014 1469 -24 0 Average/Totals 1463 26,483

Tuesday 1st May 2012 Month Opening Trans Settle Change High Low Volume May 2012 1467 1515 43 1530S 1461S 1,910 Jul 2012 1488 1535 42 1550 1482 6,607 Sep 2012 1478 1521 41 1534S 1470S 981 Dec 2012 1473 1505 38 1517S 1462S 945 Mar 2013 1442 1479 34 1492 1440S 1,315 May 2013 1450 1477 32 1487S 1449S 637 Jul 2013 1448 1479 31 1483S 1447S 46 Sep 2013 1453 1484 31 1487 1453 58 Dec 2013 1510 1489 28 1510 1510 1 Mar 2014 1497 28 0 Average/Totals 1498 12,500

Wednesday 2nd May 2012 Month Opening Trans Settle Change High Low Volume May 2012 1520 1538 23 1535 1515 3,730 Jul 2012 1555 1557 22 1558 1535 8,455 Sep 2012 1530 1546 25 1543S 1518 2,680 Dec 2012 1506 1527 22 1525 1502 1,851 Mar 2013 1484 1503 24 1501S 1482S 877 May 2013 1483 1500 23 1498 1483 721 Jul 2013 1477 1501 22 1495 1477 68 Sep 2013 1493 1506 22 1505 1493 34 Dec 2013 1506 1511 22 1506 1506 2 Mar 2014 1515 1519 22 1515 1515 2 Average/Totals 1519 18,420

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 Thursday 3rd May 2012 Month Opening Trans Settle Change High Low Volume May 2012 1542 1517 -21 1547S 1513S 2,206 Jul 2012 1558 1534 -23 1565 1525 5,398 Sep 2012 1548 1518 -28 1552 1513S 2,390 Dec 2012 1532 1500 -27 1532S 1494S 1,304 Mar 2013 1508 1478 -25 1509S 1472S 600 May 2013 1501 1475 -25 1501S 1471S 122 Jul 2013 1476 1476 -25 1476 1475S 2 Sep 2013 1478 1479 -27 1478S 1478S 1 Dec 2013 1484 -27 0 Mar 2014 1492 -27 0 Average/Totals 1495 12,023

Friday 4th May 2012 Month Opening Trans Settle Change High Low Volume May 2012 1510 1511 -6 1532S 1503S 1,062 Jul 2012 1528 1526 -8 1550S 1517 3,684 Sep 2012 1512 1514 -4 1533S 1505S 1,695 Dec 2012 1491 1495 -5 1513 1484S 843 Mar 2013 1471 1470 -8 1496 1465 636 May 2013 1470 1466 -9 1494 1462S 168 Jul 2013 1463 1466 -10 1465S 1463S 9 Sep 2013 1464 1468 -11 1464 1464 17 Dec 2013 1486 1473 -11 1486 1483 6 Mar 2014 1481 -11 0 Average/Totals 1487 8,120

Average for the week 1487 1476 1476

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 30th April 2012 Month Open Price Change High Low Volume May 2012 2370 2263 -101 2383 2242 17 Jul 2012 2309 2219 -90 2333 2146 25,697 Sep 2012 2309 2237 -85 2345 2165 6,526 Dec 2012 2329 2243 -83 2348 2174 1,755 Mar 2013 2333 2248 -79 2348 2182 1,536 May 2013 2341 2259 -76 2350 2200 365 Jul 2013 2348 2269 -73 2348 2243 56 Sep 2013 2357 2281 -70 2357 2357 10 Dec 2013 0 2294 -70 0 0 1 Mar 2014 0 2310 -70 0 0 3 Average/Totals 2262 35966

Tuesday 1st May 2012 Month Open Price Change High Low Volume May 2012 2268 2359 96 2376 2268 7 Jul 2012 2209 2319 100 2356 2193 18,133 Sep 2012 2217 2331 94 2368 2217 3,562 Dec 2012 2224 2333 90 2368 2224 1,392 Mar 2013 2231 2337 89 2373 2231 1,020 May 2013 2290 2346 87 2380 2290 335 Jul 2013 2344 2354 85 2349 2344 10 Sep 2013 2353 2366 85 2358 2353 10 Dec 2013 0 2379 85 0 0 3 Mar 2014 0 2394 84 0 0 3 Average/Totals 2352 24475

Wednesday 2nd May 2012 Month Open Price Change High Low Volume May 2012 0 2372 13 0 0 0 Jul 2012 2325 2342 23 2354 2313 13,917 Sep 2012 2338 2353 22 2363 2327 2,977 Dec 2012 2310 2357 24 2365 2310 1,654 Mar 2013 2347 2360 23 2369 2335 1,219 May 2013 2357 2364 18 2373 2341 525 Jul 2013 2362 2369 15 2370 2347 58 Sep 2013 2361 2376 10 2378 2361 17 Dec 2013 2393 2389 10 2393 2393 4 Mar 2014 0 2402 8 0 0 2 Average/Totals 2368 20373

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 3rd May 2012 Month Open Price Change High Low Volume May 2012 0 2332 -40 0 0 0 Jul 2012 2335 2307 -35 2360 2272 8,971 Sep 2012 2296 2318 -35 2368 2287 2,389 Dec 2012 2300 2327 -30 2372 2296 1,459 Mar 2013 2301 2330 -30 2374 2301 709 May 2013 2300 2334 -30 2376 2300 277 Jul 2013 2373 2340 -29 2373 2339 11 Sep 2013 2375 2348 -28 2375 2375 1 Dec 2013 0 2361 -28 0 0 0 Mar 2014 0 2374 -28 0 0 0 Average/Totals 2337 13817

Friday 4th May 2012 Month Open Price Change High Low Volume May 2012 0 2312 -20 0 0 0 Jul 2012 2307 2289 -18 2341 2272 8,061 Sep 2012 2314 2300 -18 2349 2285 2,479 Dec 2012 2322 2312 -15 2351 2294 1,094 Mar 2013 2326 2316 -14 2360 2299 1,176 May 2013 2329 2316 -18 2349 2301 210 Jul 2013 2312 2321 -19 2312 2302 362 Sep 2013 2334 2328 -20 2334 2314 377 Dec 2013 0 2341 -20 0 0 0 Mar 2014 0 2354 -20 0 0 0 Average/Totals 2319 13759

Average for the week 2319 2502 2502

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

Choose dark chocolate for health benefits WDBO Radio April 30, 2012 If you're eating chocolate for the health benefits -- and aren't we all? -- you must pick wisely, new research suggests. "Eat dark chocolate, not white chocolate," says researcher Mee Young Hong, PhD, associate professor of exercise and nutritional sciences at San Diego State University. She compared dark and white chocolate, looking at health effects, such as improving cholesterol.

Dark chocolate was the clear winner, she says. She is due to present the findings at the Experimental Biology 2012 meeting in San Diego.

Chocolate and Health Benefits: Study Details

Hong compared white chocolate, which has no cocoa solids, to regular dark chocolate containing 70% cocoa. The cocoa solids contain healthy compounds called flavonols. These have antioxidant and anti-inflammatory properties.

She also tested dark chocolate containing 70% cocoa that had been overheated or ''bloomed." ("You know when you leave chocolate in the [hot] car?" she asks. That's ''bloomed" -- melted and then maybe hardened again.)

She wanted to see if the melting would rob the dark chocolate of the health effects.

Hong's team assigned 31 men and women to eat about 1.7 ounces (a standard-size chocolate bar is about 1.5 ounces) of dark, white, or ''bloomed" dark chocolate every day for 15 days. Before and after the study, Hong's team measured blood pressure, blood sugar, and cholesterol.

Compared to those who ate white chocolate, those eating either dark chocolate had:

* Lower blood sugar levels * Improved LDL or ''bad" cholesterol * Improved HDL or "good" cholesterol

She didn't find differences in blood pressure between the white chocolate eaters and the dark chocolate eaters.

As for why the dark chocolate may help blood sugar levels, Hong says its antioxidants may help the body use its insulin more efficiently to control blood sugar. This, in turn, helps to lower blood sugar levels naturally.

Compared to people who ate white chocolate, those who ate dark lowered their bad cholesterol by about 20%, Hong tells WebMD. Dark chocolate eaters increased their good cholesterol by 20%, compared to white chocolate eaters.

The white chocolate, but not the dark, made the skin blood flow slow down -- not a desirable quality. Skin blood flow is a way to measure how the blood vessels are functioning.

The study did not have industry funding.

Chocolate for Health: Perspectives

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 Some of the findings echo that of other research, says Joe Vinson, PhD, a professor of chemistry at the University of Scranton and a long-time researcher on antioxidants in foods. He reviewed the findings.

"The fact that white chocolate (containing fat and sugar) makes the skin blood flow slow down is newsworthy," he says. The message to stay healthy, he says, is: "Don't eat fat and sugar without antioxidants."

The finding about bloomed chocolate is reassuring if you're wondering whether to eat old chocolate, Vinson says. He says it may look bad but that it still has active antioxidants.

Other studies have found lowering of blood pressure with dark chocolate, says Eric Ding, PhD, a nutritional epidemiologist and instructor of medicine at Harvard Medical School. He reviewed the findings.

The fact that Hong did not, he says, could simply be because of the small size of the study.

"The LDL decrease and the HDL increase are consistent with previous research," Ding tells WebMD.

The blood sugar finding is newer, he says.

Hong reminds chocolate lovers that moderation is key.

These findings were presented at a medical conference. They should be considered preliminary as they have not yet undergone the "peer review" process, in which outside experts scrutinize the data prior to publication in a medical journal.

Production & Quality

Fazer develops traceability of cocoa CisionWire (press release) 24 Apr, 2012 Fazer is committed to developing responsibility in the supply chain of cocoa: by 2017, the origin of Fazer’s cocoa will be traceable and all the cocoa fulfils the criteria of responsible production. In co-operation with the World Cocoa Foundation, Fazer is actively contributing to the improvement of conditions in farmer communities. In August 2012, Fazer will launch a charity campaign and direct the income to building a secondary school in a village which Fazer sponsors called Biéby in Ivory Coast.

According to its new cocoa strategy, Fazer works systematically to increase the sourcing of responsibly produced cocoa by 10 to 15 per cent each year. The goal is that by 2017, the origin of Fazer’s cocoa will be traceable and all the cocoa will fulfil the criteria of responsible production. Responsible cocoa sourcing at Fazer is based on improving traceability and following the principles of the World Cocoa Foundation: People, Profit, and Planet.

‘Developing the traceability of cocoa is our main goal. When we know where our cocoa comes from, we can be convinced there are proper conditions in the primary production. It is important to us that consumers can make a responsible choice when buying Fazer’s products,’ says Tom Lindblad, Managing Director of Fazer Confectionery.

Tom Lindblad’s views are based on a recent study according to which more and more consumers make value based purchase decisions. 24 per cent of Finnish consumers stated they pay attention to ethical issues and responsibility when making a purchase decision. Chocolate is not considered especially problematic from the ethical point of view, but consciousness of responsibility is growing. (Research Insight Finland, 2012). Attention is paid, for example, to social justice and environmental aspects. Consumers want to participate and influence by choosing products and services.

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 ‘In 2012, the share of responsibly produced cocoa will be increased to around 30 per cent. We purchased the first lots of certified cocoa in autumn 2010 when we started purchasing UTZ certified cocoa. At the moment, we work hard to increase traceability. This year, for example, we will be buying 700 tonnes of traceable cocoa from Nigeria through an organisation called Source Trust,’ says Lindblad. ‘We have also actively participated in starting European co-operation to create a common responsibility and traceability standard for cocoa.’

Solutions to challenges in cocoa farms

Representatives of Fazer regularly visit cocoa producing countries to become familiar with the daily life and ways to work in farmer communities. On their latest visit in October 2011, Fazer’s representatives went to Ghana and Nigeria.

‘ It is important to us to be familiar with the conditions in cocoa-farming communities and to find suitable partners and know their ways to work, and to build mutual trust with operators in the countries of origin this way,’ explains Cocoa and Chocolate Quality Expert Majlen Fazer, who was in the group visiting Ghana. She also stresses the significance of co-operation among international cocoa and chocolate industry in developing conditions in cocoa-farming communities.

‘We recognise the challenges in cocoa farms and want to do all we can to improve conditions in farms and communities. For example, being taught correct methods can help farmers to improve the quantity and quality of their crops. This, in turn, will increase their income levels and standards of living. This is the work we do in the village we sponsor in Ivory Coast,’ Majlen Fazer sums it up.

Fazer builds school in sponsor village Biéby in Ivory Coast

Fazer has a village in Ivory Coast called Biéby which it sponsors. Biéby is located some 100 km north-east of the port and business hub Abidjan. Fazer supports Biéby through the ECHOES (Empowering Cocoa Households with opportunities and Education Solutions) programme established by the World Cocoa Foundation. Its objective is to provide vocational training on cocoa farming to young people in the farming community in conjunction with other school teaching. ‘Fazer is taking a proactive approach in promoting a sustainable cocoa economy by leading an initiative in the village of Biéby, Cote d’Ivoire. The school they are helping to build along with the government will make a huge impact on the community and improve lives. We are proud to call Fazer a member of WCF,’ says Bill Guyton, president of the World Cocoa Foundation.

To celebrate the 90th anniversary of Karl Fazer Milk Chocolate, Fazer will raise funds together with chocolate lovers to build a new school in the Biéby village. Fazer will donate five cents for each 200-gram bar of Karl Fazer Milk Chocolate sold in August 2012 to Biéby’s school building project. The campaign will be launched in all the countries where Fazer operates.

‘Biéby has four schools for young children but none for 12 to 16 year olds. The nearest school for this age group is 16 kilometres away in another village, which is why only a few of Biéby’s 12 to 16 year olds attend school. They must either walk the 16 kilometres to school and back every day or stay with relatives or friends during the week to be closer to school,’ explains Majlen Fazer.

The building of the school will begin in autumn 2012, and the goal is to open the school in the autumn in 2013. The school will also have a small cocoa farm, where the pupils of the school will learn about sustainable cocoa farming and the correct care of the trees. The initiative will be carried out in co-operation with the World Cocoa Foundation. The cost estimate of the school is 150,000 USD.

Fazer has sponsored the Biéby village with 135,000 USD since 2007. By the end of 2011, a total of 560 young people in Biéby had received training in cocoa farming, and 100,200 cocoa trees have been planted on 55 new cocoa farms in accordance with the teachings of the WCF ECHOES programme.

Fazer has been a member of the World Cocoa Foundation since 2005. The goal of the World Cocoa Foundation is to promote responsible cocoa farming, increase the income level of farmers and to support farmers and their families. Supporting the school education of the children and youth of farmers’ families is an important part of the work.

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 Corporate Responsibility has a significant role in all business development. We make environmentally sustainable decisions. We ensure the safety of our products and the responsibility of our raw materials, and look after our personnel’s well-being. Profitable business creates a sustainable base for Corporate Responsibility. www.fazer.com/responsibility

Fazer Group The origins of Fazer Group lie in a family company founded in 1891 when Karl Fazer opened his first café in Helsinki. Today the Group offers meals, bakery and confectionery products and operates in a total of eight countries. Its operations are based on passion for customer, quality excellence and team spirit. The Group operates in two business areas which are committed to creating taste sensations: Fazer Food Services and Fazer Bakeries & Confectionery. Fazer Group‘s turnover for 2011 was nearly 1.6 billion euros. The Group employed c 15,200 people in 2011.

Fazer Food Services is a leading contract catering company in the Nordic countries, offering customers delicious food and tailor-made service solutions. Fazer Food Services has over 1,200 restaurants in Finland, Sweden, Norway, Denmark and Russia.

Fazer Bakeries & Confectionery Fazer is Finland's and Russia’s leading bakery company, second largest in Sweden and one of the leading ones in the Baltic region. Bakery products are manufactured in Finland, Sweden, Estonia, Latvia, Lithuania and Russia. In the confectionery business, Fazer is Finland’s leading company and a strong player in the Baltic Sea region. The confectionery factories are located in Finland: in Vantaa (chocolate products), Lappeenranta (sugar confectionery) and Karkkila (chewing gum).

The World Cocoa Foundation (WCF) is an international membership foundation that promotes a sustainable cocoa economy by providing cocoa farmers with the tools they need to grow more and better cocoa, market it successfully, and make greater profits. These efforts help increase the supply of cocoa and help guarantee chocolate lovers access to their favorite products. WCF’s membership includes cocoa and chocolate manufacturers, processors, supply chain managers, and other companies worldwide, representing more than 80% of the global cocoa market. For more information, visit www.worldcocoa.org.

U.S. anti-cocaine push embitters Peru chocolate makers Reuters By Caroline Stauffer Apr 25, 2012

1 of 12. Native cocoa beans (top) and beans from the CCN-51 cocoa hybrid are shown to the photographer at the Guanni Chocolates shop in Lima March 9, 2012. Connoisseurs who take chocolate as seriously as sommeliers study wine are challenging the widespread use of an inferior cocoa, the high-yielding but acidic tasting CCN-51 cocoa hybrid, pushed by the U.S. government in its war against drugs in Peru, considered by many to be the birthplace of cocoa.

LIMA (Reuters) - Connoisseurs who take chocolate as seriously as sommeliers study wine are challenging the widespread use of an inferior cocoa pushed by the U.S. government in its war against drugs in Peru, considered by many to be the birthplace of cocoa.

The U.S. Agency for International Development, or USAID, introduced the high-yielding but acidic tasting CCN-51 cocoa hybrid to Peru in 2002 to offer farmers an alternative to planting coca - the key ingredient in cocaine.

The program has had some success but chocolate makers are encouraging farmers to instead cultivate smaller amounts of rare, native cocoa that fetches higher prices from buyers who value complex and subtle flavors and judge chocolate by the personality of its cocoa, like the nose of a fine wine.

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 "I don't understand why USAID is here, in a country so rich in diversity, where everything is virgin. What need is there to introduce new varieties?" said Mariella Balbi, owner of the tiny firm Guanni Chocolates, which sells in California and in Lima. She sells boxes of 12 dark chocolate truffles made from Peru's native white cocoa and filled with local ingredients like pisco brandy and Amazonian fruits for $40.

USAID says it has a foreign policy mandate to curb coca production by encouraging alternative cash crops, not to cater to gourmets. But it also says it may be open to commercializing native varieties in the future and it is sponsoring a contest to encourage farmers to cultivate more native cocoa. "We want to help Peru become one of the world's leading specialty cocoa producers," said Loren Stoddard, director of alternative development at USAID in Peru.

Specialty cocoa can refer to organic, fair-trade or native cocoa. Gourmets say nothing makes better chocolate than native cocoa.

Building on a culinary and economic boom in Peru, start-up chocolate makers are holding tastings to highlight accents ranging from nutty to floral in chocolate made from cocoa native to distinct microclimates, altitudes and latitudes.

They say Peru will never become a global bulk cocoa supplier like the Ivory Coast, so they instead want it to be the main cocoa source for high-end chocolate makers.

"USAID did a fine job developing an alternative crop with CCN-51, but times change. What people want changes," said pastry chef Astrid Gutsche, wife of Peruvian food icon Gaston Acurio. "This idea of native cocoa is quite new and I believe it's the future for Peru. We have something that no one else has."

Gutsche hopes to promote Peruvian chocolate the way her husband, who owns restaurants on several continents, helped to introduce Peruvian cuisine to the world. She has traveled to remote jungle areas hoping to convince farmers to find and cultivate naturally growing cocoa varieties instead of CCN-51.

It can be a tough sell. Peru and its neighbor Colombia are the world's biggest cocaine producers and when farmers do abandon coca planting they usually choose the highest-yielding alternative crops.

CCN-51 cocoa, developed in Ecuador in the 1960s and planted throughout Africa to supply makers of mass- produced chocolate, grows faster and yields more than most native varieties. "There is a lot of pressure to plant CCN-51 from institutions," said Juan Rojas, who leads a farmer's cooperative in the northwest region of Piura that grows native white cocoa.

CCN-51 is considered a "bulk" rather than "fine-flavor" cocoa by the International Cocoa Organization (ICCO), and it is more resistant to the witches' broom disease that slashed output in neighboring Brazil, once the world's No. 2 cocoa producer.

Rojas says Piura's native white cocoa yields one third less per hectare than CCN-51 but that some European chocolate makers are buying it for $4,000 per tonne. Bulk cocoa fetches around $2,300 per tonne on the New York futures market.

$12 CHOCOLATE BARS?

Luxury chocolate makers value Piura cocoa's soft white flesh for its earthy, slightly nutty traces. They say it does not have the acidic taste often found in chocolate made from CCN-51.

Proponents of native cocoa believe prices paid to farmers will further increase as the market develops, citing a growing demand for single-origin foods at U.S. stores like Whole Foods and Trader Joe's.

The market for native cocoa has been discussed in the world's elite chocolate circles as a way to craft richer, more diverse treats while protecting rare cocoa varieties in danger of extinction."We want to come up with a system in which we actually link the chocolate bar directly with the origin for commercial purposes," said Moises Gomez-Miranda, a project manager at ICCO.

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 The London-based organization says the demand for fine flavor cocoa has started to grow very rapidly.

Native cocoa from Venezuela's famed Chuao region can fetch up to $10,000 per tonne though the country's overall cocoa production has fallen in recent years due to economic turmoil.

Peru is especially interesting for native cocoa fans because new varieties are still being identified in its part of the Amazon rain forest, where Spanish 'conquistadores' found the crop five centuries ago.

"The Peruvian Amazon is the cradle of cocoa and it's home to very important genetic clusters," said Maricel Presilla, a U.S.-based food historian and author of "The New Taste of Chocolate."

"Now that they have been identified genetically it is time to propagate, time to grow them. Money has to be placed into research expeditions and germ plasm banks," she said.

No one knows how many types of cocoa lurk in Peru's mountains and jungles, but two Americans recently stumbled on one genetic variety that was thought to be extinct. Now, Swiss chocolate makers produce bars out of Maranon's Pure Nacional cocoa with equipment developed in the 1800s, when Nacional was one of the world's most coveted cocoas.

Moonstruck Chocolate, a company in Oregon, sells packs of 12 chocolate bars made with 68 percent Maranon cocoa for $144. A 36-pack box of Hershey's bars, in comparison, sells for $19.95.

QUALITY NOT QUANTITY

Critics, however, say farmers are not yet paid high enough prices for native cocoa to justify the lower output. Few people are willing to pay $12 for a chocolate bar or care to pinpoint the exact location of its ingredients, they say.

"I just got back from Europe -- organic and fair trade are what's in demand. They aren't fixated on type, it could be CCN-51 it could be something else," said Rolando Herrera, President of APPCACOA, Peru's largest cooperative of cocoa growers and a USAID partner.

After the Dominican Republic, Peru says it is the world's No. 2 exporter of organic cocoa, which is worth between $100 and $300 more per tonne than bulk cocoa according to the ICCO. Rare native types, like Peru's Maranon Pure Nacional or Venezuela's Chuao, are worth much more.

Cocoa grown by former coca-planting farmers supported by USAID is sold as La Orquidea chocolate bars alongside Lindt and Toblerone in Peruvian grocery stores. In 2010, those farmers won a certificate at the Salon de Chocolat in Paris, surprising purists who consider CCN-51 incapable of producing quality chocolate.

Herrera says hybrids like CCN-51 can be considered organic, depending on how they are grown, and that the cooperatives are working with scientists to develop a new, better-tasting hybrid by grafting the CCN-51 onto native cocoa.

But Guanni Chocolate's Balbi says that practice endangers native varieties, which are becoming harder to find. She wants farmers to focus less on quantity and more on quality. "Peru is a country of fine, aromatic cocoa, and like all good things it comes in small quantities."

Africa: World Cocoa Foundation and USDA announce Borlaug and Cochran Global Cocoa Fellowship AllAfrica.com 1 May 2012 Washington, DC — The World Cocoa Foundation (WCF) and U.S. Department of Agriculture Foreign Agricultural Service (USDA-FAS) announced yesterday the continuation of the Norman E. Borlaug International Agricultural Science and Technology Fellowship Program Global Cocoa Initiative, which strengthens sustainable agricultural practices in the cocoa sector by providing scientific training and collaborative research opportunities to visiting researchers, policymakers, and university faculty.

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; 12 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org WCF also announced a new partnership with USDA-FAS for involvement in the Cochran Fellowship Program through a Global Cocoa Initiative, which provides U.S.-based training for senior and mid-level specialists and administrators from public and private sectors who are engaged in cocoa-related agricultural trade, agribusiness development, management, policy, and marketing.

The announcement was made during the 66th Annual PMCA Production Conference by Bill Guyton, World Cocoa Foundation; Patricia R. Sheikh, USDA-FAS; Louis Koko, National Center for Agricultural Research and first-ever Cocoa Borlaug Fellow from Côte d'Ivoire; Samuel Orisajo, Cocoa Research Institute of Nigeria and Cocoa Borlaug Fellowship program Alumnus; Andy McCormick, The Hershey Company; Ruth Moloney, Armajaro Trading; and Abdoulaye Traore, Mars Incorporated.

Borlaug Global Cocoa Initiative

Jointly selected by WCF and USDA, the Borlaug Fellows will complete a two to three month fellowship in the U.S. By 2016, this program will sponsor twenty cocoa scientists in total, with ten from Africa, five from Southeast Asia, and five from the Americas. Fellows are placed in American universities or research institutions and work with a mentor to further their work.

The fellows will also participate in several activities organized by WCF designed to improve their knowledge of the cocoa supply chain and build linkages with other researchers and industry members. These activities can include education visits to WCF member companies including port/warehousing facilities, processing plants and manufacturing plants.

Bill Guyton, president of the World Cocoa Foundation said, "The Cocoa Borlaug Fellowship Program is an excellent example of a successful public-private partnership that is mutually beneficial for cocoa farmers and the cocoa industry. The important work of these scientists helps to address challenges in the cocoa sector, improves cocoa production, and in turn, supports increased incomes for farmers and their communities."

"The World Cocoa Foundation has been an invaluable private-sector partner in USDA's efforts to foster sustainable farming practices and strengthen communities in cocoa-producing countries around the world," said Suzanne Heinen, administrator of USDA's Foreign Agricultural Service. "We are pleased to be expanding this successful partnership, and with WCF's continued support we will be able to broaden our impact by offering training and mentoring opportunities not just to the scientific community, but to other public- and private-sector professionals as well."

Dr. Louis Koko, Soils/Nutrition/Physiology Scientist at the National Center for Agricultural Research (CNRA) in Côte d'Ivoire added, "The Cocoa Borlaug Fellowship Program is an exceptional opportunity to improve my scientific abilities. It has been a great honor for me to be selected as the first Cocoa Borlaug Fellow from Côte d'Ivoire. For young scientists like me, the Borlaug Program is a key that opens the doors of the scientific world. I remain convinced that my participation in this program will encourage other young scientists from Côte d'Ivoire and other countries to apply for this fellowship." Following the announcement, Koko was to participate in the PMCA Conference and visit chocolate manufacturing facilities in central Pennsylvania owned by WCF Member companies Archer Daniels Midland, Cargill, The Hershey Company, and Mars Incorporated.

Cochran Fellowship Program - Global Cocoa Initiative

The Cochran Fellowship Program, Global Cocoa Initiative, provides U.S.-based training opportunities for senior and mid-level specialists and administrators from public and private sectors that are concerned with cocoa- related agricultural trade, agribusiness development, management, policy, and marketing. Cocoa, although grown outside the U.S., is an essential ingredient for products manufactured and sold in the U.S., and is directly responsible for nearly 70,000 American jobs.

The Cocoa Cochran Fellowships will help countries to increase the quantity and improve the quality of cocoa to better meet the needs of U.S. manufacturers.

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; 13 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org By 2016, this program will sponsor twelve fellows, from Africa, Southeast Asia, and the Americas. Fellows will complete a two- to three-week fellowship in the U.S. through educational study tours that could include visits to WCF member companies, U.S government agencies, and universities.

Millions of people in Africa, Southeast Asia, and Latin America depend on cocoa farming for their living. The prevalence of pests and diseases, among other issues, are an obstacle to cocoa production and significant source of crop losses in all three cocoa-growing regions.

In Latin America alone, farmers can lose up to 60% or more of their cocoa crop to diseases and pests. WCF supports research efforts and training programs to further the economic, social, and environmental sustainability of cocoa production.

Cocoa growers fault FG on agric budget Vanguard By Boluwaji Obahopo May 2, 2012 National Coordinator of Golden Cocoa Growers Association of Nigeria, GCOGAN, Dr. Tunde Arosanyin has criticised the Federal Government over its alleged poor agricultural policy, saying the government was paying lip service to the sector.

Speaking in an interview with Vanguard during the association’s National Executive Committee and Board of Trustee meetings held in Lokoja, the Coordinator said it was wrong for the government to allocate only 1.7 percent of its budget to agriculture.

He said: “Nigeria is signatory to the MAPUTO declaration of 2001 which mandated every Africa country to allocate at least 10 per cent of its annual budget to agriculture. “The difference between 10 per cent and 1.7 per cent is clear; so will the outcome.”

He also said the implementation of the agriculture incentive to farmers this year was lopsided as those who could not benefit were asked to wait till next farming season, adding that this showed the level of insincerity of President Goodluck Jonathan’s administration in resuscitating the sector as a means of revenue generation and feeding of the populace.

Nigeria slides in cocoa production by 20% - Association Leadership Newspapers By: Our Correspodent 03/05/2012

Cocoa growers in the country have expressed concern over the 20 per cent decline in production recorded between 2008 and 2012.

Dr Tunde Arosanyin, tthe National Coordinator of the Golden Cocoa Growers Association of Nigeria (GCGAN), said this in an interview with newsmen in Lokoja on Thursday. He noted that the 30 per cent increase in production recorded between 2000 and 2007 had been erased, attributing it to inconsistency in government policies.

Arosanyin, who is also a national official of AFAN, was in Lokoja for the National Executive Council meeting of the association. He said that the stoppage of all the initiatives introduced by the Obasanjo administration to stimulate cocoa production, was the immediate cause of the dismal performance of the country’s cocoa sector. He also accused middlemen of denying cocoa farmers a greater part of their income, saying that the apathy towards the country’s cocoa beans in the internal market, was a deliberate attempt to bring the down the price.

To arrest the downward slide in cocoa production, Arosanyin urged the Federal Government to reintroduce the sale of herbicides, sprayers, insecticide, fertilisers and other inputs at subsidised rates. He also underscored the

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; 14 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org importance of access to credit at single digit interest rate and encouraging the local consumption of cocoa products among Nigerians.

The coordinator further stressed the need to reintroduce the National Cocoa Development Board as was constituted during the Obasanjo administration to stem the tide. He noted that the budgetary allocation to agriculture in the 2012 budget was not only ``grossly inadequate'' but also contravened the 2003 Maputo Declaration in which African leaders recommended 10 per cent. He advised the government to put in place a mechanism that would give farmers a return on their investment so as to keep them on the farms. He decried the continued dependence on imported food, saying that Nigeria had the ecological advantage to produce rice, maize, cotton, groundnut, cocoa, cassava, oil palm and sorghum, among other food items for local consumption and export.

Meanwhile, the President of the association, Chief Moses Aliwa, in a separate interview, told NAN that no cocoa farmer benefitted from the N200 billion Commercial Agriculture Fund provided by the Federal Government. Aliwa appealed to the Minister of Agriculture and Rural Development, Dr Akinwunmi Adesina, to ensure that farmers were given adequate assistance. He called for the intervention of the Federal Government to ensure the availability of ``Ridomil'' and other herbicides recommended by the Cocoa Research Institute of Nigeria (CRIN).

NAN reports that CRIN introduced the herbicides to replace copper sulphate which had been banned due to its negative impact on health.

Armajaro invests $1 Million to boost Ecuador’s Fine Cocoa BusinessWeek By Isis Almeida May 03, 2012 Armajaro Trading Group Ltd., a London- based supplier of cocoa, sugar and coffee, is investing $1 million over three years to increase production of fine cocoa beans in Ecuador, the largest producer of the variety.

Ecuador accounts for more than half of the world’s supply of fine cocoa, according to the International Cocoa Organization in London. While cocoa production in the country jumped 86 percent over the past 10 years, a 2007 ICCO study shows the share of fine beans fell to just under 5 percent of global output from about 50 percent at the start of the century.

Farmers in Latin America’s second-biggest producer have been expanding plantations of a pest-resistant variety, known as CCN51, as yields can be about four times higher than those from the traditional Nacional Arriba cocoa, according to Nicko Debenham, Armajaro’s director of development and sustainability. About 110,000 metric tons of the 190,000 tons of cocoa the country will produce this season will come from CCN51 beans, he said. Those beans are considered ordinary cocoa, according to Ecuador’s National Cocoa Exporters Association, Anecacao.

“There are a lot of efforts to try and bridge the problem that is asking someone to grow Nacional with a quarter of the yields of a CCN51 and yet not paying them four times the price,” Debenham said in a telephone interview from London yesterday. “Concerns are that if Ecuador does not maintain its fine flavor crop because of the pressures of CCN51, chocolate makers will have to resort to a new source of beans, which will impact the flavor of their chocolates.”

Training Farmers

Armajaro’s investment will be used to train farmers in Ecuador to help them lift yields of their Nacional Arriba crop to at least a ton per hectare (2.5 acres) in small farms, Debenham said. The project started last year and it will run for another two.

Yields of Nacional Arriba in small properties can be as low as 200 kilograms (441 pounds) a hectare, compared with about 1 ton per hectare of the CCN51 variety, he said. In plantation- type areas, where cocoa is farmed intensively, Nacional yields can be about 400 kilograms a hectare, less than the 2.5 tons a hectare of CCN51, he said. Some new varieties of Nacional are able to generate much higher yields.

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; 15 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org “There are lots of efforts and attempts to try and recover the yields of this very valuable cocoa, because the fine flavor users are desperate to ensure they have a good supply,” Debenham said. “We are working directly with farmers, particularly Nacional farmers, to try and help them significantly improve their yields of fine flavor cocoa.”

Armajaro is also segregating the two varieties in farms they are working with and ensuring there is a market for CCN51 as well, Debenham said.

Fine Flavor

“One of the biggest problems for the fine flavor concept of Ecuador is the blending of CCN51 into Nacional, which then ruins the fine flavor,” he said. “We promise to our customers that we will keep the two varieties separated.”

Ecuador is renowned for producing a fine bean, which is an aromatic, floral and spicy cocoa, according to information on the website of Nestle SA (NESN), the world’s largest food company. The maker of Kit-Kat and Crunch bars buys over a fifth of the world’s fine cocoa.

The CCN51 bean was created in Ecuador in the 1960s, according to Anecacao. The variety gained popularity, especially in the private sector, because it was more resistant to pests and provided higher yields, Debenham said. “One of the biggest problems for Ecuador is Witches’ broom and Monilia, particularly on Nacional cocoa,” Debenham said, referring to pests that affect cocoa trees. “Until there is a very, very big awareness of a massive improvement in the yield of a Nacional, the growth will continue to be CCN51.”

The Market

Sulawesi cocoa exports more than double BusinessWeek By Eko Listiyorini and Yoga Rusmana May 01, 2012 Cocoa-bean shipments from Indonesia’s main growing region on Sulawesi island more than doubled in April, climbing for the first month this year, after exporters released stockpiles as harvests may peak.

Overseas shipments from Central and South Sulawesi provinces jumped 126 percent to 7,912 metric tons last month from March, according to data released today by the Indonesia Cocoa Association. Sales were 1,570 tons in April last year.

Increased shipments from the world’s third-biggest producer of the chocolate ingredient may help to halt the 5 percent gain in prices in New York this year, potentially easing the cost for Hershey Co. and Nestle SA. (NESN) Ivory Coast and Ghana are the largest and second-biggest cocoa producers.

Exports may climb further as the country’s main harvest season may peak this month or in June, La Odi Mandong, secretary at the association’s South Sulawesi branch, said by phone from Makassar.

The two provinces represent about 75 percent of bean exports and output from Indonesia. Shipments from the region in the first four months of the year dropped 45 percent from a year earlier to 18,826 tons, association data showed.

July-delivery Cocoa futures fell 3.9 percent to $2,219 a ton on the ICE Futures U.S. in New York yesterday.

Indonesia’s cocoa production may drop more than 11 percent in the next five years to below 400,000 tons as farmers switch acres to more lucrative oil-palm and rubber crops, Zulhefi Sikumbang, chairman of the cocoa association, said March 16.

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; 16 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Processing & Manufacturing

Ivorian cocoa prices up on grinders, local demand Reuters By Loucoumane Coulibaly May 2, 2012 ABIDJAN (Reuters) - Farmgate cocoa prices in Ivory Coast's main growing regions climbed last week, supported by firm demand from local grinders and merchants, farmers and buyers said on Wednesday.

In the western region of Soubre, in the heart of the cocoa belt, farmers said the average price rose to between 550 CFA francs ($1.11) per kg and 600 CFA, up from 500 CFA to 550 CFA the week before, as some buyers paid higher prices to meet growing demands for volume.

"There was strong demand from grinders. Some farmers were able to get up to 600 francs, because the grinders want lots of cocoa," said Salam Kone, who farms near Soubre.

"The quality is not very good. We are far from seeing main-crop quality, but we are seeing lots of local buyers loading trucks to go sell in the port of San Pedro," he added.

In the western region of Gagnoa, farmers said the average price surged to between 525 CFA francs and 575 CFA from 500 CFA to 525 CFA the previous week as merchants competed to build stocks in anticipation of higher prices expected in the coming weeks once the mid-crop truly gets underway. "The price has gone up because many of the warehouses that were closed are now open. People are looking for lots of cocoa in order to sell later at higher prices," said farmer and coop manager Francois Badiel.

A similar scenario played out in the western region of Duekoue where farmers said prices rose to between 525 CFA and 550 CFA, up from about 500 CFA the previous week.

The mid-crop in top grower Ivory Coast is usually marketed from early April to September, but a five-month dry spell that lasted until March has delayed harvesting, which is expected to pick up slowly this month.

In the centre-western region of Daloa, which produces a quarter of Ivory Coast's national output, farmers said farmgate prices increased to between 500 and 550 CFA francs per kg from between 450 CFA francs per kg and 500 CFA the week before on growing demand. "There is more and more demand. Trucks are loading up in the bush, but buyers are requiring a lot of sorting before they take anything," said Marcel Aka, who farms in Daloa.

The purchases manager of a European cocoa exporter said the average price at the port of Abidjan had risen slightly to between 750 CFA francs and 780 CFA for major buyers from around 750 CFA the previous week. "The prices aren't moving too much at the port. There's still not much cocoa, and it's bad quality, but we think that things will start moving in the next two weeks," said the manager, who asked not to be name.

Business & Economy

Ivorian uncertainty weighs on cocoa industry Financial Times By Emiko Terazono May 4, 2012 As the leading cocoa traders, buyers, producers and confectioners sit down for their triennial bash at London’s Grosvenor House on Friday night, they will be aware of the various uncertainties surrounding the industry.

Those assembled will hear talk about the worries over real supply figures in Ghana – the second-largest producer of the commodity used to produce chocolate. They will also discuss the weather impact on the new crop. But everyone will be voicing their opinions on the industry’s biggest uncertainty: Ivory Coast’s new cocoa marketing system.

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; 17 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org The west African nation, by far the largest producer of cocoa, providing more than a third of the world’s output, is in the process of reforming the trading and pricing of cocoa exports, its main source of income.

Until now, exporters, including top trading houses such as Cargill, ADM, Barry Callebaut, Olam and Armajaro, have been free to buy and sell the commodity with the price dictated by the market in London. The fully liberalised system, which left farmers exposed to the international cocoa price set in London, came under the auspices of the World Bank in 1999.

The country is now reversing tack. Under President Alassane Ouattara, who came to power last year, the Ivorians have created a new regulator – Cocoa & Coffee Council – as well as initiating daily auctions to sell part of Ivory Coast’s next crop, to be harvested from October 2012. Based on the auctions, the cocoa and coffee regulator, led by Massandjé Touré-Litsé, will set a guaranteed price for farmers, as well as the export price of cocoa.

The Ivorian forward sales have already weighed on the cocoa market as they have come on top of forward selling by the Ghanian authorities, which have traditionally released their crop ahead of the next harvest. Ghana has for years run a state-controlled system in which the government fixes a price for farmers, guaranteeing them a stable income.

Industry estimates of how much the Ivory Coast has auctioned since January range between 400,000 to 550,000 tonnes – just under half the Ivorian annual production of about 1.3m tonnes. “In effect, you now have two crops being forward sold at once,” says one leading cocoa trader.

Apart from the price pressure, the Ivorian auctions are deemed to be going smoothly, and ahead of the cocoa dinner, the CCC gave a presentation on Thursday at the Sofitel in London on the reforms.

Mme Touré-Litsé confirmed that the purchase limit for each exporter or trader in the auctions for the earlier “main crop” between October and March was 110,000 tonnes. She also noted that a “stabilisation fund” to make up for the discrepancy between the price paid to farmers and the export price would total CFA Fr70bn ($140.4m). The auction system will also be launched for coffee from June, she added. She also announced that auditors PwC were conducting a study on the economics of cocoa grinding. This will help the Ivorian government’s decision on controversial tax incentives for large foreign processors with cocoa grinding operations in Ivory Coast.

However, the CCC had little to offer on two key questions – maintaining quality control of the beans and the mechanism at which prices are set – issues yet to be resolved between the Ivorians and the exporters.

Those who buy cocoa from Ivory Coast currently discount the price they pay for inferior-quality beans brought in by the farmer. However, the new rules ban discounting from the price set by the CCC leaving the exporters without a means for quality control

Industry executives are also worried about how their costs and margins will be factored into the regulated pricing.

A stable source of good-quality sustainable cocoa from the world’s largest producer is essential for the cocoa industry, which needs the Ivory Coast’s reforms to succeed. However, industry executives are worried that the push for reforms without important details could lead to a rocky time ahead for the market.

One executive at a leading trading house warns there could be a short-term physical shortage in the market once the 2012-13 harvest starts in October unless the details are not ironed out soon. “In general people are nervous, so they will want to make sure they are not short,” he says.

Labour Issues

Environmental Issue

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; 18 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org Research & Development

Promotion & Consumption

Others

World Bank to buy cocoa trading stake Financial Times By Emiko Terazono May 3, 2012 The World Bank is to buy a stake in a commodity trading house founded by Anthony Ward, the hedge fund trader who squeezed the cocoa market two years ago.

The IFC, the investment arm of the World Bank, is to take a 6 per cent stake in Armajaro Trading, a specialist in cocoa, coffee and sugar, suggesting a valuation for the trader of about $200m-$300m.

The move by the bank comes as the IFC seeks to step up investments in agricultural trading houses, as higher food inflation becomes a priority for political leaders. “In order to reach the poorest parts of the world’s population you need to work with the intermediaries,” said Vipul Prakash of the IFC. Mr Prakash added that similar investments with other commodity trading houses were in the pipeline.

Trading houses are rapidly becoming popular investments among governments and sovereign wealth funds, with CIC of China investing in Noble Group and Singapore’s GIC recently revealing a 5 per cent stake in New York- listed Bunge.

In the past, the IFC has taken an equity stake in Singapore-listed Olam and coffee trader Ecom Agroindustrial. It said investments in companies which “integrate the supply chain” was now part of its core strategy.

The investment in Armajaro Trading is part of a deal under which the IFC will lend the trader $55m in mezzanine debt. Armajaro came under the spotlight in 2010 when the hedge fund run by Mr Ward bought a large quantity of cocoa beans, leading to a jump in prices. The fund, CC+, and several others are owned by Armajaro Asset Management. Armajaro Trading is the physical trading arm of the group, buying from producers and selling to processors.

Mr Ward and co-founder Richard Gower have a 71 per cent stake in the company, with the remainder held by management and employees.

Mr Prakash said that the IFC had done due diligence on its investment in Armajaro. Armajaro Asset Management counts the World Bank’s employee pension fund among its clients.

Richard Ryan, chief executive of Armajaro Trading, said that the trading house was looking at acquisition targets and hoped that the IFC’s investment would reassure executives of those companies it wanted to approach.

Armajaro Trading has been an advocate of greater sustainability and traceability of cocoa and coffee. The IFC’s investment would be used to help fund building farm infrastructure, Mr Ryan said.

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; 19 FAX: +234-1-290-4262 Email: [email protected] Website: www.copal-cpa.org