Indonesia is one of six countries, along with Ghana, Ivory Coast,
India, Brazil and Papua New Guinea in which Kraft, which bought
chocolate giant Cadbury in 2010, is investing to boost productivity over
a 10-year period, it has greater scope to make gains than larger
African producers, the director of corporate affairs for Australian and
New Zealand, Simon Talbot, says.
is a bit of a sleeping giant in cocoa,” Talbot says. “We’re quite
bullish in terms of productivity gains there. If you look at Indonesia
compared to Africa, you’ve generally got better infrastructure, better
levels of education, literacy, so in terms of farmer education, the
gains you can get by developing good agricultural practice and the
uptake should be faster. So we’re quite confident.”
incomes in emerging markets are boosting demand for snacks and sweets
and with the International Cocoa Organisation (ICCO) predicting demand
will outstrip supply in coming years, manufacturers are keen to increase
production of cocoa. Kraft, which last month spun its snacks division
into a new standalone company, Mondelez International, is seeking to do
that by spending $400 million over 10 years to bring about productivity
gains and improve conditions in farming communities.
so-called Cocoa Life program builds on a program started by Cadbury in
Ghana, India and the Dominican Republic. Of the planned $400 million,
the company will spend $100 million in Ivory Coast alone to help 75000
farmers double their productivity. The gains arguably are greater in
Indonesia and Papua New Guinea, Talbot says.
can be boosted even with relatively simple changes to farming
practices, he says, citing the example of a farm in Sulawesi, Indonesia,
where “decent sustainable practices” have boosted production from 400kg
per tonne to between 1.2 tonnes and 1.4 tonnes.
seen ... a lot of work done around very low yield grades and very
simple improvements that can double or triple supply,” he says.
and Papua New Guinea supply 23 per cent of the cocoa used in the
Australia-New Zealand market and the company can double that proportion
just by making efficiency gains, he says. Indonesia joined the peak
industry body, the ICCO, only last month.
The company will make its first investments under the program by March next year.
initiatives in the cocoa business are nothing new. In fact, an ICCO
survey identified as many as 64 initiatives being implemented by 60
agencies or companies. The problem, rather, is too many separate
projects that are not co-ordinated and can even compete with each other.
Last week, Mars Chocolate said it would extend a sustainability
initiative it began in Indonesia. Nestlé aims to source 15 per cent of
its cocoa globally from farmers supported by its own sustainable
development program by next year. Talbot says Mondelez has no plans to sign up with other producers.
is the world’s biggest chocolate company saying, ‘When we buy cocoa,
there is going to be a new standard in terms of the way we treat farmers
and the way farming practices are undertaken’,” he says. “We’re not
particularly concerned which variety standards may already sit or exist
underneath the Cocoa Life system. We can work with most of those
announcement, and the recent ones by Mars and Nestlé, coincide with the
start of a key meeting this week of the global industry in Abidjan,
Ivory Coast. In 2011-12, Africa produced 2.83 million tonnes, or 71 per
cent, of the world’s global cocoa output of 4 million tonnes.
Asia-Oceania came a distant second with 590,000 tonnes, or 15 per cent,
while Latin America produced 574,000 tonnes, or 14 per cent, ICCO
Source: BRW, 20 November 2012