Chocolate shortage spurs revival of cocoa

Farmers in the San Martin region of Peru process cocoa seeds to sell them as pure chocolate at a local market. [Photo/AFP]

With chocolate prices surging, a former Credit Suisse Group AG banker wants to help revive cocoa farming in the Amazon basin, where the beans are thought to have evolved about 15,000 years ago.

His campaign, located in Peru, is part of a Latin American push to gain more control of an industry now dominated by West African farmers who provide 70 percent of the market.

The effort comes as drought, disease and government price controls have cut into the ability of Africa's suppliers to meet demand, boosting prices by 7.4 percent in2014.

Enter Latin America, where academics believe cocoa originated. At onetime, the confection was known by the Aztecs as the drink of the gods, and eventually it was introduced into Europe by Spanish conquistadors.

Now, the former banker, Dennis Melka, is joining a push by Brazil, Ecuador and Colombia to return a legacy product to its roots.

"The market is growing faster than Africa's ability to supply it," said Melka, chief executive officer and founder of Cayman Islands-based United Cacao Ltd." It's an incredible window of opportunity to supply and change the confectionery industry."

Melka, who left Credit Suisse in 2005, was a director for the company's emerging markets coverage focusing on Southeast Asia. He founded Asian Plantations Ltd, which cultivates palm oil in Malaysia, and later began growing palm and other tropical crops in South America, where land is less expensive.

Tem peramental crop

In November, he sold Asian Plantations in a deal valued at 188 million pounds ($286million), according to data compiled by Bloomberg. The following month, United Cacao raised $10 million in an initial public offering in London, and the shares have since gained 35 percent.