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cocoa beans 400ABIDJAN: The world's cocoa sector must avoid provoking a long-term glut of beans that could harm farmers' incomes as it works to head off a looming structural supply shortfall, the head of the International Cocoa Organisation (ICCO) said.


Cocoa trading companies, chocolate makers, producer countries and other actors met in top grower Ivory Coast this week to discuss ways of making the cocoa sector sustainable.


"We are not necessarily in favour of a massive increase in production for the simple reason that we must avoid a glut on the market that could lead to a drop in prices," the ICCO's Executive Director Jean-Marc Anga told Reuters on Friday following the meeting.


The ICCO is the global organisation of cocoa producing and consuming countries.


The ICCO and the cocoa industry foresee annual shortfalls approaching 1 million tonnes of beans within a decade if current trends of stagnating production and growing demand linked to consumer growth in emerging markets continue.


Cocoa trees on plantations in West Africa, responsible for the bulk of global production, are ageing and so are farmers as young people leave farms to seek other employment.


Yields in West Africa are low with most cocoa plantations currently producing around 500 kg of beans per hectare.


Most leading cocoa and chocolate companies have launched their own sustainability programmes with goals including an improvement in yields by as much as three fold.


"We're in a context of structural deficit, and we take into account the concerns of the industry," Anga said.


"Our concern is a cocoa economy that is sustainable but also balanced. We don't have the intention of favouring supply over demand," he said.


The World Cocoa Conference, while applauded as the first such meeting of its kind, produced few concrete results.


Industry actors and producer countries signed a non-binding resolution to elaborate sector-wide approaches to tackling environmental and labour issues as well as promoting sustainable production and consumption.


Anga announced the ICCO's headquarters would be moved to Ivory Coast from London, although he gave no precise timetable.


The next World Cocoa Conference will take place in The Netherlands in 2014.


Copyright Reuters, 2012

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