Market Assessment

Solomon Islands Cocoa Value Chain Analysis, the World Bank, 2014

    The objective of this value chain analysis is to identify the most promising opportunities for increasing the contribution that the sale of cocoa can make to rural livelihoods and the national economy. The analysis aims to map cocoa value chains, focused on elaborating practical pathways to improving production and marketing and where feasible developing partnerships between domestic, international and other stakeholders.

    Summary of results
    There are also demonstrable benefits that could accrue with efforts to increase production of Solomon Islands cocoa. Market trends analysis demonstrates that prices have increased by on average 13% and related to this production has increased by on average 5% over the last decade to 2013; and based on forecasted price increases of between 10% and 30% annual production is realistically expected to reach what is considered to be an achievable target of around 10,000 Metric tons by 2020. Value chain analysis demonstrates that smallholder gross margins are around SBD 11 million annually, or over SBD 40 million annually including processors, and total gross margins are around SBD 55 million annually, at today’s price; and based on forecasted price increases of between 10% and 30% smallholder gross margins are expected to reach between around SBD 15 million and SBD 24 million annually, or between around SBD 35 million and SBD 45 million annually including processors, and total gross margins are expected to more than double to over SBD 90 million annually.

    Realising the sorts of benefits that could potentially accrue to stakeholders in the cocoa value chain, as illustrated by various price rise scenarios, will require specific measures to improve the productivity of cocoa trees, processing and handling of cocoa beans, production and the service delivery capacity of MAL. Improving productivity will require support to Research and Development (R&D) and husbandry provided to smallholders through the combined efforts of the Ministry of Agriculture and Livestock (MAL), the Ministry of Commerce, Industry, Labour and Immigration (MCILI) and exporters; improving processing and handling will require support to infrastructure and regulation provided to processors and traders through the combined efforts of the MAL, MCILI, Commodities Export Marketing Authority (CEMA) and exporters; improving production will require support to price and marketing provided to exporters through combined efforts of MAL, MCILI and exporters. Also, public and private partnerships between government, development partners and private sector enterprises including domestic and international stakeholders will offer opportunities for improving services to the cocoa industry.