THE GENERALITIES ABOUT COCOA (CACAO )

The cocoa tree is strictly a tropical plant, thriving only in hot, rainy climates with cultivation generally confined to areas not more than 20 degrees north or south of the equator. The cocoa tree takes four or five years after planting to yield cocoa beans and from eight to ten years to achieve maximum production. Where ideal conditions exist (a consistent balance of rainy season and plenty of sun as in Ivory Coast ), harvesting can be essentially continuous almost every month. Countries with more distinctly separate dry and wet seasons normally harvest twice a year (a main crop and a mid-crop).

HISTORY OF A G LOBAL C OMMODITY

Cocoa, like a number of ¡°exotic¡± beverages and spices, was originally served as a luxury drink to the Aztec court. The Aztec King Montezuma reportedly served this new beverage to the first Spaniards to visit his court in 1519. For the Aztecs, the ¡°chocolatl¡± was a ¡°food for the gods.¡± The liquid was so highly prized in the Aztec empire that it was used as a kind of currency. This pivotal role in international trade established the early importance of the value of cocoa, and subsequently the complexity of pricing that commodity.

When the Conquistadors brought that original bitter drink back to Spain, the Spanish royalty quickly adopted it as their own, sweetened it with cane sugar, added spices and later learned to serve the drink warm. It proved so popular that Spain developed a very lucrative trade in cocoa beans from the new colonies and, in the tradition of royal prerogatives, kept the secret of making the cocoa beverage hidden for over a hundred years.

The secret of cocoa finally reached the rest of the continent via the Spanish monks who had been charged with processing the cocoa beans. It soon became the preferred drink of the French Court and by the middle of the seventeenth century, the exotic beverage had found its way into England. In England and in other European countries, demand led to the creation of special chocolate houses that served the beverage to the aristocracy and the wealthier merchant class who could afford this hand made, high-priced product. The first change in the luxury pricing structure of cocoa came with the introduction of the steam engine. This revolutionary invention hastened the development of the mass production of chocolate by mechanizing the cocoa grinding process, thereby increasing supply and driving down the price. By the early part of the eighteenth century, the price of chocolate declined to the point where the general population could afford to buy it.

Ivory Coast is located on the southern coast of West Africa. Its exports include: cocoa, gold, rubber, palm oil, coffee, and tropical woods. The cocoa trade drives one-third (1/3)of Ivory Coast's economy.

Ivory Coast, the world's top cocoa producer, had been the pride of France's former colonial empire for prosperous decades after independence in 1960. A downturn in commodities prices and political change in the 1990s brought instability, and the country suffered its first military coup in 1999.

Civil war erupted in September 2002. A power-sharing deal brokered by the French ended major fighting in March 2003, but otherwise failed to take hold.

Fighting has flared up again with the deaths of French soldiers stationed in the country to keep the peace. Now ,we can say the situation is normalised.

Ivory Coast provides 43 percent of the world's cocoa beans . Ivory Coast is the top grower of world's cocoa beans: 1,290,000 during the 1999-2000 growing season.

There are approximately 600,000 cocoa farms in Ivory Coast. Ivory Coast is the world's fourth-largest Robusta coffee grower (after Vietnam, Indonesia, and Uganda). Coffee and cocoa crops are often grown together, so the taller cocoa trees can shade the coffee bushes. On some farms, the same workers harvest both crops.

The eight primary cocoa producing countries are Ivory Coast (more than 40%), Ghana (about 15%); Indonesia (14%); Nigeria (5%); Brazil (4%); Cameroon (4%); Ecuador (3%); Malaysia (2%). Other countries produce the remaining 9%. The cocoa produced in Ghana and Ivory Coast has long been recognized as the standard for basic cocoa grade. Total annual world production in recent years has been around the 3 million metric ton mark.

In Ivory Coast, approximately 90% of all cocoa is produced on these small farms. Cocoa production is heavily dependent on two factors: available land (tropical rain forest) and access to labour (often migrant). While growing cocoa is not generally labour intensive, harvesting the cocoa pods does not lend itself easily to mechanization. The fruit (bean) of the cocoa tree appears as pods. When ripe, these pods are cut down and opened; the beans are removed, fermented and dried (preferably by air and sun). Each pod produces from 20 to 50 beans (approximately 400 beans are required to make one pound of chocolate). Weather conditions, disease and insects can have a major effect on annual cocoa yield. Black pod disease has become a major concern for African growers.

Cocoa growth characteristics, therefore, are much more restrictive than cotton or sugar and are major contributors to price uncertainty. In addition the concentration of production in two countries (Ivory Coast and Ghana = approximately 55% of world production).

CONSUMING COCOA

On the demand side, the developed countries with the highest incomes are the major processors and consumers of cocoa-based products.

The amount of cocoa ground for use (known as the quarterly cocoa ¡°grind¡±) is traditionally used to measure consumption trends. Higher grind figures indicate rising demand.

The Netherlands has historically been a leading processor of cocoa, accounting for about 15% of the world's annual production of cocoa. The United States has nearly equalled that amount in recent years. Substitutes for cocoa butter in the manufacturing process (a very contentious issue in the industry, particularly in Europe), use of cocoa butter in non-food items such as cosmetics and changing popular tastes are also factors in the supply/demand cycle.

What's about COFFEE?

Coffee trees are grown mostly in Latin America and Africa, and they grow best at high altitudes. They are grown either on plantations and estates, or on small farms. 70% of coffee beans are grown by small farmers. Seedlings are grown in nurseries for one year. Once planted in the fields, they require about five years of cultivation before the cherries are ready to be picked. A cherry is two coffee beans, surrounded by layers and covered a red outer pulp. Coffee is grown with other crops which rise above the short coffee trees to provide the shade which the trees need. Once the cherries are harvested, the beans are extracted. Next, the beans are fermented for 12 to 36 hours . Finally, they're washed and dried outside on parchment for three to five days .These green beans are stored until they 're traded.

The challenge

Coffee is the second largest US import after oil, and the US is the largest consumer of coffee in the world, using one-fifth of the worldwide supply.

OUR PROPOSITION

ITEX ONE :

We are company ITEX ONE (International Trade and Exchange) based in Italy, having branches in the whole world. As our qualifier indicates it. We are specialized as regards search for market and transaction between operators.

Our associates:

We obtained the confidence of a group of farmers organized in co-operative in the area of Divo in Ivory Coast, with which we carry out a network of sale of their harvests of Cocoa and Caf¨¦ (and soon even of Cotton). This group in the past sold its harvests with the state Man from the Ivory Coast, but for more than three years the state has not ensured any more all the guarantee promised as regards maintains agrarian, of transport, storage and sale to the foreign operators. Today this group seeks through us a means of finding new purchasers and of thus ensuring the future of their activity.

Our action:

Here it would have to be specified that ITEX ONE is given the responsibility to take care on a constant annual production with a policy of direct compensation in the event of difficulty on behalf of the farmers and also an active intervention in the case which a problem arises during the routing towards the harbour of Abidjan, the capital of the known as country. In few words, ITEX ONE ensures the purchasers the mark of guarantee of a better quality coming from a geographical localization of origin controlled, a regular transfer of products towards the harbour of Abidjan where stocks are constantly renovated in order to avoid any attempt at loss of the stored product.

QUALITY

The area of the South-east of Ivory Coast and precisely the zone of Divo , is strewn with small drills and is located in full hot and wet tropical climate. It is in this universe that are born, pushes and is collected these two invaluable products of nature. It is of a coffee of Robusta species , an exceptional and single taste of this area and about a cocoa classified amount best in quality on the world scale in front of that South-American. The transformation of these agrarian products into semi-finished products (on request of the purchaser) is done in a traditional way, which makes it possible the products to preserve all their savour of origin.

QUANTITY

It should be known that for the problems of storage and conservation, the cocoa and the coffee are sold by rotation with each harvest.

The importance of volume depends:

The level of the financing available to the co-operative or the operator average .

materials (vans) available to the co-operative to ensure the collecting, the collection and the evacuation with the port.

Aptitude that the leaders of the co-operative have, to work out a good work program and to ensure a good rotation of the working capital.

regional production of the cocoa and coffee.

In the area of Divo where it is produced each year between 110.000 and 130. 000 tons of cocoa; and approximately 50.000 tons of Robusta coffee per annum.

The cocoa is sold by batches of 25 tons beforehand damaged in bags of 60kgs .

There are also loadings (loadings) in bulk in the containers of 25 tons or 50 tons .

For the moment, our associates sell their products in the form of broad beans hardly collected and dried. But within very short times will be installed a unit of transformation of powder and butter broad beans. As of the nearest countryside, this unit could be operational being. you will be informed as soon as all is ready.

IN THE PLANT HEALTH FIELD

The plants are actually treated with chemicals for a defense against a possible parasitic invasion or foungine as by normal usance. It should be known that these products are approved by the State of Coast-D' Ivory, through the UNIPHYTO and the ministry for the industry of the Ivory Coast. These products are in addition subjected to the requirements and International Conventions as regards plant health products; and thus there is no fear on this level.

WORK OF THE MINORS

For that which knows the work of the cocoa at the edge of field, it is really unthinkable that a child of less than 17 years sees himself entrusted a cocoa or coffee exploitation.

Will know that a cocoa or coffee plantation is always entrusted to a married man.

Moreover the cocoa and coffee plantations in Ivory Coast do not extend on great surfaces; contrary to Brazil and Colombia. They are family and nonindustrial exploitations.

It is besides what makes difficult the marketing of the products at the edge of field.

¡°Consequently, we put whoever at the challenge to prove the use to us of children in the fields of cocoa and coffee. ¡±

PRICES

The price applicable to the unit is in conformity with the international standards on the respect of the work of the farmer ( Fair-trade Labeling Organizations Internationals ). Besides that come added the standing fixed overheads with exploitations and the commission with ITEX ONE. In short:

1€ = ¡À 650Fcfa 1¡ê = ¡À 1,5€

*In the harbour ,to release products : 800 Fcfa/kg for Cocoa and 522 Fcfa/Kg for Coffee (not include in our total price .It can be included only if the customer ask for a special service)

ACQUISITION OF THE PRODUCTS AND MODES OF PAYMENT:

Modes of payment

The aforementioned purchase price is payable in the following way:

A ) Initial deposit

With this offer, the bidder gives an order check that represents 50% of the total sum in euro to the salesman as an initial deposit that has to be worth on the purchase price.

B ) Cash

At the moment of the sale contract signature, the bidder must pay the other 50% of the total sum in euros, by irrevocable credit, confirmed and referred letter and/or by credit stamped transfer, issued to the salesman order. The credit letters must be issued by a first order bank. 

C) Payment place

The bidder promises to pay the settled prices on the account indicated by the salesman.

Delivery m ethod

A. Quantity and periodicity

The parties will agree in a hereby appendix about the quantity and periodicity of deliveries.

B. Delivery place

The delivery place will be the one chosen by the parties at the moment of the contract conclusion.

In the absence of such a choice, it is agreed that the assets will be delivered at the Abidjan harbour, at the place agreed by the parties at the bidder's expenses.

PARTICULAR ARRANGEMENTS

Salesman representations and guarantees

While accepting this offer, the salesman represents and guarantees what follows to the bidder. Moreover, the salesman recognizes that all and each one of the aforesaid representations and guarantees constitute for the bidder the conditions without what this last would not have contracted. The aforementioned representations and guarantees must also be true at the moment of sale contract signature.

•  The salesman has the right and the capacity to have the concerned assets and to have them freely;

•  The salesman doesn't belong to any contract likely to affect the aforementioned assets;

•  The aforementioned assets are at the date of the signature hereby, free and clear of all mortgages movable, complaints, safeties, appropriations, seizures or other loads of any nature that is able to burden them;

•  The aforementioned assets are in good physical condition, just as in good operating condition;

•  The salesman will produce at the moment of the sale contract signature; the phytosanitary certificate or any other document issued by the country export administration, attesting the asset quality.

-If it is not available, the bidder can ask or require it.

-If it appears that one of these mentioned conditions is not filled or that the salesman confirms to the bidder that it could not be realized at the date of the sale contract signature or one or other of the representations and guarantees is false or inexact, the bidder can notify to the salesman that he cancels this purchase offer. In such a case, the bidder immediately notifies the salesman by any way with a sign.

-In this case, the salesman will have to rectify this situation within a time of 30 days.

Taxes

The bidder and the salesman recognize that they are registered according to the relative tax laws in their respective countries.

TO INVEST WITH US

ITEX ONE seeks in the way to simplify always things, makes its markets most accessible possible for all. It is in this measure which we propose to you also the possibility of investing directly on the territory of the Ivory Coast by the construction of buildings of semi-transformation of the products that you would buy. In this scale of the things, we invite you to directly contact our central seat in Italy