Caribbean Export OUTLOOK 2016 - 2017

OUR COMPETITIVE ADVANTAGE

Trade in cocoa beans within the Caribbean needs to be carefully facilitated (no tariffs or duties; strong disease control measures, etc.) to fully realise the synergies of comparative advantages available across the region.

This combined effect of increased productivity of the cocoa trees and improved labour operational efficiencies is leading tomuch greater profitability andmore income for the new generation of cocoa farmers adopting these methods.

linked to flavour profiling, and the Genebank can be used for further competitive advantage, providing new tastes in premium priced cocoa with greater market segmentation and specialisation. Geographical Indications (GIs) is another marketing mechanism for extracting higher prices for the cocoa derived products which include health foods, confectionery, drinks, cocoa powder, cocoa liquor, and cocoa butter. The Caribbean also has an excellent track record of innovative value-added agro-processing of its crops into globally marketed foods and drinks. For example, rums (from the sugar industry), Tia Maria & Sangster’s Liqueurs (from coffee), Ting soft drink (from grapefruit), Angostura Bitters, exotic cuisine such as “jerk” fromherbs and spices. So it comes as no surprise that over the past 10 years or so, the Caribbean marketplace has given rise to a growing list of indigenous chocolatiers – Cocobel (Isabel Brasch, Trinidad), Chocolate Dreams (Michelle Smith, Jamaica), Tobago Estates Chocolates (Duane Dove, Tobago), Exotic Caribbean Mountain Pride (Astrida Saunders, Trinidad) and the Grenada Chocolate Company, amongothers.Betweenthem,thereisanimpressive array of high quality, world-class, cocoa-derived, innovative food, drinks and health products for local markets. There exists tremendous opportunity for these businesses to grow further and for new entrants to emerge to supply the 30 million tourists that visit theCARIFORUMregion

withhigh quality branded chocolate products sold at premium prices. Increased demand can only serve to increase the prices paid to the local growers for their cocoa beans. Further afield, access to the largest andwealthiest export markets in the USA, Canada and the EU also makes the value-added in this sector an attractive proposition for overseas investors. Indeed, a few foreign investors are already present with Hotel Chocolat (Saint Lucia) and the Diamond Chocolate Company (Jouvay, Grenada) being in the vanguard of this investment activity. They each provide useful insights into possible models of investment in the Caribbean, particularly when it comes to joint ventures. The increasing availability of more affordable, modern, integrated, mini “bean to bar” chocolate processing factorieswill only accelerate these types of investment ventures across the Caribbean in the years ahead. Trade in cocoa beans within the Caribbean needs to be carefully facilitated (no tariffs or duties; strong disease control measures, etc.) to fully realise the synergies of comparative advantages available across the region. For example, low energy costs in Trinidad favour energy-intensive processing of the beans, whereas the larger tourist traffic in Jamaica favours sale of finished cocoa products to this market.

Competitive Positioning, Value-add & Attracting Greater Investment

Although fine cocoa production levels account for only 5% of the weight of total cocoa global figures, there is a high premium price on the product, vis-à-vis bulk cocoa. For generations, the prevailing quality of cocoa frommost Caribbean countries has been universally classified as fine cocoa and that classification alone attracts a price premiumof 50% to over 100% of bulk cocoa bean prices. Fine cocoa and its derivatives are in essence niche products and competitive positioning in the marketplace will be on quality and differentiation and not price. Located at Centeno, in Trinidad and Tobago, is the world’s largest repository of genetic material for cocoa – the International Cocoa Genebank, about 40hectares of diverse varieties of cocoa trees imported fromtheAmazon andCentral America. This resource initially gave rise to the Trinitario fine cocoa variety through hybridisation. Now, tantalisingly, even more quality differentiation is possible with innovative genetic manipulation

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