Prices of dry cocoa beans in domestic market has fallen by Rs. 50 a kg this season affecting growers. Prices of wet beans have dropped by more than Rs. 10 a kg, according to market sources.
Cocoa beans are mainly used by chocolate, food, and cosmetic industry. Cocoa is cultivated as an inter-crop in areca plantations in the coastal and Malnad belt.
Prices of dry beans in domestic market hovered between Rs. 173 and Rs. 180 a kg during the same time last year. Now, it fetched between Rs. 123 and Rs. 130 a kg. In the international market, the prices of dry beans varied between Rs. 150 and Rs. 155 a kg now like last year, according to M. Suresh Bhandary, Managing Director, Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd. (Campco).
Prices of wet beans which hovered between Rs. 42 and Rs. 45 a kg. during the same time last year has fallen to Rs. 28 and Rs. 33 a kg. now, he told The Hindu. Citing reasons for the drop in prices, Mr. Bhandary said that as dry beans in domestic market cost more last year multinational chocolate manufacturers in the country began procuring dry beans from international market, which costs less. It resulted in less demand and drop in prices for domestic dry beans since March, 2012.
In addition, he said that while procuring the beans from international market, the companies entered into a long-term procurement agreement with the specified government bodies of identified countries. The duration of the agreement extended even up to six months. Using a provision (relating to certificate of origin) under Indian Customs Act, 1962, the companies availed concession for paying customs duty in India. As per the terms of the agreement, the companies would have to import dry beans till the term of the agreement.
Otherwise, they would invite the penalty. Hence even if prices of domestic beans now has fallen to Rs. 130 a kg. which was below the international price of Rs. 150 to Rs. 155 a kg., the companies have been forced to import the beans at higher rate.
Mr. Bhandary said that prices for domestic dry beans were likely to jump again by Rs. 20 in a few months when the term of the agreement of the companies would expire. The domestic price was likely to match with the international price.