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Shortage of Quality World Cocoa Supply Looms; Price Incentives Offered.

The world's leading chocolate makers may face a growing supply shortage of quality cocoa beans as a plunge in prices reduces incentives for farmers, according to Rabobank, a Netherlands-based leader in agriculture financing. Cocoa prices fell 14 percent in the past year, plunging to a 27-year-low in February, as leading growers in Africa, the Ivory Coast, Ghana, Nigeria and Cameroon saw harvests increase on favorable weather.

While the chocolate industry is shifting from buying and processing cocoa pods to focus funds on marketing and building brand names, it needs to offer price incentives to safeguard quality of supply, says the report. Nestlp[acute{e}] SA, Mars Inc., Philip Morris Cos., Cadbury Schweppes Plc, Hershey Foods Corp. and other leading chocolate makers, who consume most of the world's 3-million-tonnes cocoa output, need to work with farmers to set aside higher grades of cocoa and pay a higher-than-market price to ensure stable supplies, said Rabobank.

Already, Mars is working on a project in Africa that seeks to improve the quality of crops on a sustainable basis. There are separate initiatives to produce cocoa organically and pay a higher price for the output. The quality of cocoa has deteriorated in countries such as Nigeria and Cameroon after the government lifted controls on the trade and left exports in private hands since early 1990s, the report said.
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Comment:Shortage of Quality World Cocoa Supply Looms; Price Incentives Offered.
Publication:Food & Drink Weekly
Geographic Code:00WOR
Date:Jul 24, 2000
Words:223
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