Cocoa economy: An international perspective with special reference to Indian scenario

Abstract

Global cocoa production is concentrated in few countries, where four West African countries contribute 70% of global production.From Asian region, Indonesia has competitive advantage of low cost of production and high yields (1000kg/ha). Over the last 26 years world cocoa production grew at a compound growth rate of 3.6%. The increase in production during the period was 1.55 million tons with 65% area effect and 21% yield effect. Western Europe and Northern America together consume 2/3rd of global cocoa production. The time series analysis of cocoa prices reveals a regular cyclic pattern resulting from structural deficits and surpluses of cocoa bean stocks. India produces just 0.32% of global production.The estimated acreage response function revealed that weighed average of lagged cocoa prices and price risk had significant impact on area allocation with supply elasticities 0.38 and -0.042 respectively.