The small Caribbean country of St. Vincent and the Grenadines wants to cash in on the world’s booming taste for chocolate. The lush, volcanic island chain struck a deal recently with major commodities trader Armajaro to start growing cocoa, betting it will provide a much-needed economic boost in one of the Caribbean’s smallest nations Reuters reports.
“Farmers are already lining up,” St. Vincent and the Grenadines Prime Minister Ralph Gonsalves told Reuters. Armajaro, a leading cocoa trader, will provide training to local farmers under the agreement in exchange for being the sole buyer of their cocoa. “We are looking for fine flavor, high-value premium cocoa,” Nicko Debenham, Armajaro’s director of development and sustainability and the project leader, said in an interview.
For the farmers, cocoa could be a good bet. Increased demand for chocolate in emerging markets, particularly Asia, has lifted world cocoa prices despite fears of a global economic slowdown. A former British territory, St. Vincent and the Grenadines is home to just over 100,000 people. Located in the southeastern Caribbean, its mountainous islands are popular with yachting and boating enthusiasts.
Like many small, fragile Caribbean states, it was hard-hit by the global financial crisis and its tourism- and agriculture-dependent economy is still struggling to recover. The country has long been largely dependent on a single crop: bananas. Once helped by European Union trade preferences, banana production employs more than half of the national workforce, many of them small farmers, and is the top export.
However, a phasing out of EU preferences and fluctuations in banana prices led government officials to begin a push to diversify the economy, now mired in a three-year recession. “We have suffered greatly,” Gonsalves said. “There are lots of challenges. But this provides a chance for some of the land that was cultivating bananas to go into cocoa.” ICE cocoa prices CCc2 hit a 32-year high of $3,775 a tonne in March at the height of a conflict in the world’s top producer, Ivory Coast, after a disputed presidential election.
While prices have fallen around 30 percent since the situation in Ivory Coast stabilized, they still exceed levels seen through the late 1980s and lasting until 2008.
Drawn by the rise in prices, authorities in St. Vincent and the Grenadines began promoting the crop several years ago and approached Armajaro to help stimulate production. Armajaro’s Debenham said the agreed project aims to start planting on 500 acres (200 hectares) by mid-2012. If initial plantings are successful, they could be expanded within five years to 5,000 acres (2,000 hectares) potentially producing between 2,500 tonnes and 3,000 tonnes, he said.
“It’s more about the challenge of starting something from nothing than the outright volume of it,” Debenham said. Growing cocoa is not new to St. Vincent and the Grenadines, which also produces coconuts, sweet potatoes and spices. Today, cocoa is produced only in very small amounts. “It’s not being farmed,” Debenham said. “They’re basically selling it in single bags at a time to locals who make cocoa sticks.”
Global cocoa demand is on course to outstrip supply in the coming years as aging trees and a lack of investment in some of the world’s top producers limit production. In the Caribbean, the Dominican Republic ranks among the world’s ten leading producers. Other Caribbean countries have also begun to show an interest in producing the crop, lured by the prospect of higher prices.
Premier Gonsalves said he did not expect cocoa entirely to replace banana farming. But he predicted it would help bring a change in farmers’ livelihoods and contribute toward turning around the country’s sputtering economy. Raised in a rural area and an owner of some farmlands, Gonsalves said he too planned to try his hand at producing cocoa. “I intend to grow some myself,” he said.
For the original report go to http://af.reuters.com/article/commoditiesNews/idAFN1E7AF0QY20111116