Former Palm Oil Investor
Makes $27 Million Cocoa Play
Plantation planned for Peru aims to take advantage
of long-term decline in West African output
A worker holds cocoa beans in Ivory Coast on Nov. 26.
While commodities prices have fallen heavily over the
past year, cocoa prices have risen to levels not seen
since 2011, when they were driven upwards by political
upheaval in Ivory Coast, the world’s biggest producer.
By KATHERINE DUNN
A
former palm oil investor is betting
$27 million that cocoa prices can
only go up.
Dennis Melka, a former Credit Suisse
banker with a past in the Malaysian
palm oil business, is behind a fledgling
cocoa plantation in inland Peru that he
said would become the world’s largest
individual producer of the bean.
Mr. Melka said the economics behind
the plantation, which won't produce at
full maturity until 2021, are clear: to take
advantage of what he predicts will be a
long-term decline in West African output,
the traditional powerhouse of cocoa
production, just as emerging markets
are developing a taste for chocolate.
“Where is the growth in this industry
going to come from? In my opinion, the
only place it’s going to come from is
Latin America,” he said.
About 70% of the world’s cocoa comes
from West Africa, and nearly 60% comes
from just two neighbouring countries:
Ivory Coast and Ghana, according to the
International Cocoa Organization. But
not everyone agrees that production will
decline. Alassane Ouattara, President of
Ivory Coast, the world’s largest producer,
has said the country intends to produce
half the world’s beans by 2020, up from
42% last season. These are the words of
a politician, of necessity, an optimist.
According to the World Cocoa
Foundation, cocoa consumption is
expected to rise over the next 10 years,
potentially leaving room for growth in
FARMERS GAZETTE
November 2015
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