Vinay Chand Associates

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Coconuts at Crossroads
 
Consultant Economist
Rural Development,
Soft Commodities
 
and
 
Renewable energy cogeneration
using biomass, biogas and biofuels.
 

Vinay Chand

  Rural Development Consultancy

                      and Co-generation based on

                      Biogas/Biomass and water purification 

SUMMARY

Main areas of expertise are: 

Rural Development

Value Chain Analyst

Export Development

Marketing and Distribution

Soft Commodities

Renewable Energy

Cogeneration

Water Purification


Product coverage includes:         

rice;   wheat;  maize;                 

sugar;                

soya beans,  soya oil and soya milk;       

coconuts (coconut milk,  coconut skimmed milk,  low fat coconut desiccated,   tender coconut water,   coconut oil,   coconut meal,   virgin coconut oil,   coconut shell charcoal,   coconut shell activated carbon,   rubberised coir mattresses,  car seats and   coconut peat and coconut mulch);             

edible oils; oil palm;            

edible nuts;       

horticulture;              

rubber; tree crops;                    

cogeneration; renewable energy;biogas; biofuel;             

hard fibres;  jute;  cotton;             

mineral water; desalination;             

essential oils; spices; oleoresins;           

food industry additives;


SOFT COMMODITIES IN CRISIS

Hike in Commodity Prices

 

At last, even the Bank of England and Starbucks are complaining about the speculation in commodities and the harmful impact on the world economy of this high level gambling at our expenses. The same people who gave you the financial crisis of 2008 using globalisation and the funds it has generated are now giving us the commodity crisis.

Rice at $500,

coconuts for 25 cents each,

cocoa around $2,500,

rubber at $3,000,

wheat at $600,

soy and coconut oil at $1,200,

Why the commodity price bubble ?

That is the million dollar question. It is not bad weather. It is not a collapse of production. China and India cannot bring about such a price hike with increased consumption. The fall in the value of the dollar was not enough to explain it. In all likelihood, it is a wall of money seeking refuge in soft commodities. The sums involved are so huge that they dwarf normal life in commodities.

Is there cause for concern ?

One may ask - if prices are so good - why worry. Why not jump up and down with glee. After all, soft commodities have long been underrated with falling real prices. The poor have been steadily getting poorer. This time it is not just traders but farm gate prices have also benefited. In real terms, prices are no where near their highs in the 1970s. If only, and it is possible that there is an element of truth, they would stay high.

But if all soft commodity prices are up, it is a bubble and the trouble with bubbles is that they burst. It is impossible to tell truth from fiction, real or fictitious value. Rather, we know it is not real but we feel it should be because it appears to be paying respect at last to commodities and real value on which we depend. Many producers and traders are trying hard to convince themselves that prices must strengthen further and that this change is demand led.

This time, farmers have benefitted from the commodity price hike, as have traders. They may as well enjoy the windfall. The speculators are making billions if not tens of billions, of dollars so we need not lose sleep for them. However, the rise in food prices will have been painfull for the urban poor and the landless rural populations. It may even fuel global inflation. The industrial workers of China who are building our products will need to be paid better to be able to eat.

How far will prices drop ?

Anyone who knows for sure could become very rich. However, it is very likely that we are in for a bit of profit taking by the speculators and then a price collapse. How far prices collapse is the interesting question, since it is only then that we will know if there has been an improvement for commodity producers even if it is only likely to be an improvement in nominal terms.

What is undeniable is that we are living through interesting times when nothing is easy to understand. There is no shortage of soft commodities, the price hike is a speculative bubble!

 

There are two aspects to our activities:

 

1     Development Consultancy as a Marketing and Agricultural Economist

 

2     Developing mainly biogas/biomass and waste heat for power generation  and water  purification.

 

These two activities grew with practice. As a lecturer, Vinay found himself undertaking market research and enjoying it. From that it became marketing consultancy and Vinay quit teaching to become a full time Consultant in 1978. The fact that they were mostly connected to development led to agriculture and fortitutous meetings to water purification. However, there are also particular current interests and expertise and these include:

 

  • Coconut products markets -

              coir (needlefelt, stitched blankets, rubberised coir - car seats and

              mattresses) 

              peat, mulch,

              milk (wet and powder), skimmed milk,

              flour,

              tender coconut water,

              virgin coconut oil,

              barbecue charcoal, activated carbon,

              biofuel, biogass,

              multicropping.

              (click coconuts for details on production and markets)

 

  • Pro Poor, Export led higher value agricultural diversification

 

  • Value chain analysis

              (click value chains analysis page for examples)

 

  • Polygeneration - renewable energy + purification of water + heat/cooling

 

  • Arsenic contaminated well water remediation

 

  • Rinse water stations for the semiconductor industry

 

 

                                                                   developments:

 

The global coconut sector is undergoing radical changes
 
In the last two years a lot of commodity prices reached very high levels, often reversing decades of falls in real value. Despite a fall in prices from the abnormally high levels reached last year, it is unlikely that edible oils in general and coconut oil, in particular will fall to the lowest levels known in prior years. For one thing, India and China have greatly increased consumption of edible oils. There are also developments that promise to place a floor beyond which oil prices will not fall easily because of the possibility of using coconut oil as a biofuel. The world market price for coconut oil is not very far from a tipping point where people will reluctantly consider using it as a fuel. On remote islands, the cost of freight for mineral oil already means coconut oil is far cheaper than diesel. Can we really blame the Solomon Islanders, for example, for considering using it as fuel at US$ 1,000 per tonne instead of the meagre US$ 200 they obtain for their copra FOB in usual years although of course it is $ 600 just now.
 
Coconut milk continues to grow in popularity with higher value better quality products in powder form and UHT aseptic packaging gaining most. There are alternatives, in the form of higher value products. Zico and Coco Vita have set the pace with their water from green coconuts. Their prices are too tempting to resist. Movie stars from Hollywood are reported to be investing $10 million. Others will enter the foray and coconut water will develop into a major end-use. It would be easy to sell three times more and may be possible to go well beyond that now that Coca Cola and Pepsi Cola have bought the two trailblazers and there is a lot of interest in the Far East to produce water. Philippines are now in line to establish the first plant and there are reports of production in Thailand.
 
Some caution should be exercised because as supply rises, prices will fall and personally I dont like the taste of the product. I did not find any great advance over the Tetra Pak solutions we were putting forward in 1979. However, many consumers do and that is what counts. Over 80 million coconuts are being used for the purpose already.
 
There is also milk and a whole series of derivative products that could be developed. It may even be time to start producing virgin coconut oil in larger quantities provided that a more equitable share is earned by producers.
 
The potential use of coconut oil as a diesel substitute is attracting a great deal of attention. The EC has established a generation plant using coconut oil in Vanuatu and is setting up another 9 pilots. The ADB is funding a feasibility on a pilot plant in the Solomon Islands. The use of coconut oil as fuel is now accepted for remote islands and the relative prices of coconutoil and diesel will determine how far this process goes. There is, in the way of an illustration, a very successful 45 kva plant at Port Orly in Santo, Vanuatu, established under EC funding and working for the last 3 years without mishap.
 
There are also development with by-products. Coir production is now around the 800,000 ton mark. Peat is around 350,000 tons and mulch is setting the pace. With some good backing a move towards higher values is very possible. GTL is doing just that. They have researched what happens downstream and are GTL hope to access some of that value. With backing from a carbon fund, GTL is poised to greatly increase production and marketing. Most of all GTL brings state of the art management to a very traditional industry. If GTL achieve even part of their targets, they will become the world's largest single producer of peat or coir.
 
In some countries husks will have the same value as coconuts. As an average, they already do! At the farm level, this offers the possibility of a commercial value for husks in addition to one for coconuts. Coconut shell charcoal is also at higher prices than ever before and there are good prospects for market development.
 
A major pilot project is intended for the Pacific Region with finance from the European Commission. A project is to be formulated imminently and over 20 million euros are expected to be available. Coconut water, milk, cocodiesel and VCO are expected to be included together with greater by-product use. We are playing an advocacy role in the development.
 
Higher value processing of coir and peat allows processors to pay for husks what farmers get paid for coconuts at present. This simple result has far reaching importance. It has the same commercial impact as when peat sales developed and it could be sold as well as the coir from husks. Up to now, coconuts are generally dehusked on the field and lie as waste products. Only in a few countries were people paid to collect these waste husks for coir processing. It was rare for farmers to be paid anything significant. With husks acquiring a commercial value, the situation changes and farmers can charge for the husks that are being collected. They get paid twice, once for the nut and once for the husk.
 
There are three main product categories:
 
HUSKS                                  SHELLS                                 KERNELS
- burn,                                   - handicrafts,                         - fresh,
- mulch                                 - charcoal,                             - copra,
- coir and peat,                     - flour,                                   - oil and meal,
- processed coir,                 - activated carbon.            - milk,
- rubberised coir,                                                                - water,
- mattresses,                                                                       - virgin oil.
- car seats           
 
Husk products can actually be worth far more than kernel ones and, in any case, there is no reason why farmers should not be able to sell husks and nuts at roughly the same price, thus doubling their incomes.
 
Amongst high value coconut products, we include:
 
Rubberised coir mattresses
Rubberised coir car seats
Barbecue charcoal
Activated carbon
Tender coconut water
Coconut milk
Coconut milk products
Coconut wood products
Virgin coconut oil
Anhydrous coconut oil
Fatty acids
 
The gap between factory gate and retail is a completely natural outcome of the value chain but the extent of the gap is interesting to say the least. The best illustration at present is that of virgin coconut oil where factory gate is often as low as $1,500 per ton while retail equivalent can be $40,000 and above. There can always be a rational explanation for such wide discrepancies and free marketeirs would say that it will only attract new producers and the differential will fall. Coconut oil only sells at around $700 per ton qs an average but $1,500 just now and virgin oil is not so much better at factory gate that such a wide gap is justified. Fair Trade is favoured by many and although it represents an advance in improving returns to farmers, we do not regard it as very fair once all the margins are taken into account. It is time to consider equitable trade, going further than fair trade.
 
Nestle and Starbucks and a group of multinationals also do not like Fair Trade, citing recent studies that show that farmers do not benefit very much from it. They prefer working with farmers in the course of strengthening supply chains. The approach is based on the sound principle that farmers need to be enjoying better conditions to have a long term interest in supplying produce. This approach requires use of extension to play a proactive role with farmers and for funding to be channelled to them through intermediaries.
 

Having for 32 years looked at production, processing and marketing of commodities and products, With more than a million dollars spent on exploring markets, Vinay Chand Associates has decided to shift focus from consultancy to marketing and distribution, and into project promotion. We are in the process of raising finance to establish a trading company that will focus on high value coconut products. We hope to commence later this year. The products we will sell include: coconut husk peat; milk; virgin oil; cheese. The two options on funding were either from one major investor or small sums from a number of investors. The operation will be based in London and some secondary processing will take place in the UK.

 

We will only handle excellent produce and products, made to the highest specifications with environmental consideration and with fair terms for all in the supply chain. There will be no comromises with ethics and quality. Only the best will be offered for sale. The brand developed will have that image. Where produce or products are not available to the highest specifications, the trading company will leverage investment to enable it.

 

There are too many in the field who have no incentive to complete projects or train local successors. What suffers is the development process. Yet everything is recorded as a great success. The end of projects becomes perpetuation of the bureaucracy. No actual development on the ground results. Incredibly, the management structure is so weak that the practice is allowed to continue.

 

There are a few exceptions. Some organisations are better than others. some lead to 90% of the money disappearing while others result in 60% hitting the ground. We like working on projects, in the way of illustration, funded by the European Commission, the World Bank, IFC and bilaterals like NORAD. Most of all we prefer private sector projects where a larger proportion of money hits the ground.

 

All high profile major positions in development are filled by politicians nominated for the posts and selection is by political jockeying. They used to appoint some people from the private sector but this is now largely moribund. The process leads to a supervisiory cadre that does not supervise and a bureaucracy that does not care. Emphasis is on paper solutions to paper problems. We want to see developments on the ground.

 

We have seen so many projects end up as paper reports that we would now like to use our knolwedge and contacts to implement projects. Not that we blindly worship the market, but market driven and commercially viable projects often need that missing link that prevents implementation, the link usually being the market or finance.

 

In short too much development money leads to very little on the ground and we are anxious to work with things that do lead to that conclusion.

 
 

 

1    

Consultant Marketing Economist

 


The two areas above are closely connected in that they are both directed towards poverty alleviation and sustainable development. The choice of areas is a historical accident in origin but one that we are exploiting to give synergy.


Vinay Chand started his Consultancy career by undertaking market research in Europe, Canada and USA, but also in emerging markets in India, Indonesia, Philippines, Thaialnd, Malaysia, Singapore, Hong Kong, Cambodia, Bangladesh, Sri Lanka, and the Gulf states. There was no particular specialisation at first but slowly became oriented towards soft commodities. There was a trend towards undertaking market research especially in areas where data was not readily available. A natural development was to extend this to marketing and distribution. Over the years, we gained extensive and intensive experience in markets in mainly developed countries. Since then consultancy has broadened to looking at it from the viewpoint of developing countries, as export led agricultural diversification, rural development and sector analysis.

 

The markets we have most often looked at are USA, Europe, Australia, Japan and Korea but we have looked at a very wide range of markets, including those in producing countries. More so than most others. We have, in particular, studied the markets for coir products, jute, sisal, tuna, fruits and vegetables, essential oils, spices, microchips, water purifiers, mattresses, car seats, peat, kitchen electricals and geotextiles. Most of the product markets have been looked at more than once and some frequently.

 

Our interest in markets has not diminished. It is still the core aspect to our approach. A market orientation is very often spoken off but sadly often by people who have no real idea of what it means. In the private sector this is considered a fatal mistake. In development, there are many multi tens of million dollar projects that are cavalier in their approach to markets. So very often, there are no allocations for market verification just a blind assumption that the existence of markets can be taken for granted. In this context the ostensible interest in being market driven became a terrible illusion. In order to be market driven, you need to start off with the market.

 

The gap between what multinational corporation know about the market and what agricultural commodity producers know is huge. Essentially, the former know nearly everything and the latter know next to nothing. It is an unequal relationship and that is why it is safe to say that all the money is in marketing.

 

Market research

 

has thus covered primary agricultural commodities, products produced from the commodities and non agricultural products. Both, quantitative and qualitative research has been undertaken. This includes survey design, testing, implementation, supervision, analysis, focus discussion groups, key informant interviews and intensive one to one interviews. Care has to be taken since market surveys are not equally easy to undertake in all markets. Moreover, they yield varying results. A mechanical commitment to surveys is most unwise. Qualitative research can be far more useful in many situations, particularly in developing countries.

 

Primary commodities                                Products based on commodities

 

Cereals - rice, maize, wheat                         Flour

Horticulture - fruit and vegetables                  Coconut milk, activated carbon, coir, peat

Edible oils                                                   Juices and soft drinks

Spices                                                        Essential oils and oleoresins

Rubber                                                        Coated fabrics

Tree crops                                                   Tea, coffee and cocoa

Sugar                                                          Charcoal

Vanilla                                                         Confectionery

Balsa                                                          Teak

 

Other Products

 

Mattresses               Car seats                Insulation boards                 Grow bags                 Geotextiles

Kitchen electricals     Vehicles                 Food machinery                   Food additives           Boats

Parachutes               Citric acid               Carpets and rugs                  Wallhangings            Doormats

Cushion covers          Textiles                  Water purifiers                      Furniture                  Clothes 

Decoratives                Energy                   Inflatable boats                    Inflatables                 Microchips

Floorcoverings            Gabions                 Forestry products 

 

 

The starting point is information. We need to know what the situation is for the farmer to understand the micro poverty focus. Rigorous value chain analysis is required and although the private sector is used to undertaking this, donor and funding organisations are not. The crops have to be studied to understand what is happening to incomes and why and what the possibilities are for diversification. Global markets need to be examined to assess the balance between supply and demand and implications of changes in the two. Speed of urbanisation will reveal the speed with which a problem is developing and needs to be tackled. It boils down to information. To know what needs to be done and  what the likely consequences will be of actions is crucial for strategy. In our experience what is most important is thestarting point and that in most cases has to be the farm gate price. It is surprising how many value chains are incorrectly analyused because of the lack of real farm gate prices.

 

Surprisingly, although a great deal is said about Information Technology, We (the world) know very little indeed about soft commodities. The data available is a jumble, often contradictory, prone to errors and seldom analysed. Fancy titles are given, powerful institutions and Governments boast of plans on how they will make use of the tremendous advances in IT technology. Thus agriculture is often neglected at the expense of value added and industry and services, which also amounts to not being pro poor. In most cases, there can be no real development without rural development. In some cases rural development is a pre-requisite to creating the markets for urban development.
 
Data on soft commodities in the public domain is available from FAO, UNCTAD, USDA, ITC, COMTRADE,and other similar international sites.Some is also available at international commodity bodies such as the Asian Pacific Coconut Community (APCC), and the International Jute study Group (IJSG) as well as national commodity bodies such as the Indian Spices Board, and regional networks like CTA..Even the CIA publishes useful and generally reliable information on crops. There is good disaggregated data on imports and exports into those countries that maintain excellent customs records and this includes USA, Canada, EU, Egypt, India, Australia, Japan amomgst others. 
 
There are country reports by the World Bank, EC, DIFID, ADB, and other donors and even project sites like the one on the EU-ACP Action Plan. The above are the tip of the iceberg because there are many reports that are not placed in the public domain for entirely reasonable reasons of confidentiality and I suspect sometimes because they would be embarassing to release. Secrecy has always been a useful cover for incompetence. Unfortunately, it also means that there are mountains of useful information that are rarely read and maybe sometimes, never read.
 
There is good data available from Industry Associations, such as those for palm oil coconuts, pepper coffee, cocoa, and soyabeans, and mainly confined to the leading traded soft commoditites. Again, relatively little analysis is published even when the data is there. There is little justification for developing databses without rigorous analysis. Without an indepth understanding of the markets for soft commodities, there is a temptation for politicians and jounalists to be attracted by grandeoise schemes that deliver little.
 
Even smaller schemes that sound rational, such as concentrating on diversification into high value crops as a main strategy are often made in ignorance of the scale of problems and the contribution such commedable but limited interventions can achieve. For a small country, high value horticulture may lead to an extra $20 million while changes in the main value chains may lead to many times that amount. Data is required to quantify the problems, options and target results.
 
Those seeking current data have more serious obstacles to overcome. All the published data referred to above is dated. Production (2006/07) is less dated than trade (2005) and the latter less so than prices or consumption (2003) on the FAO database. For current data, there is no alternative but to search on the web. Some is available only on subscription, other on payment. Charges for paying sites are high although they often allow developing countries free access. Access to such data has not spread to the private sector free of charge in most cases. Real time data, of course is only available from trading floors. Despite the problems in obtaining current data, and leaving aside real time data which is not our business, is important because there are often major developments within the last two years that are not covered by data in the public domain. To obtain this, you have to have connections. In the way of illustration, without current data, it is impossible to predict which way prices will move this year or the next. We may not be able to obtain current data but will try to make it as current as possible.
 
We also like to translate global soft commodity data into trade maps, a very fashionable expression with rather poor actual delivery. What too many think is a trade map is the accumulation of data submitted by countries to the FAO or ITC or another institution. It is to say the least a trifle ambitious to call these trade maps. Vinay Chand has long been trying to develop physical and financial trade maps for soft commodities. It is possible, it takes time and is not going to be cheap. Without some version of a trade map, it is difficult to undertake a trade needs assessment or strengthening. Not many people have accumulated enough experience and knowledge to seriously try to do trade maps.
 
Vinay Chand Associates has an insatiable thirst for finding out how things really are with soft commodities. For more than 30 years Vinay Chand has been amassing information on soft commodities in the way of crops, processing, trade, markets, prices, and value chains in over 50 countries. In order to understand current developments you have to know about the past and from where and how those current developments are emerging. Historical data need not be used at every point but it has to have been analysed. There are usually good reasons why things are as they are and not as they could be. Only by understanding that can you seriously try to change things.
 
We offer consultancy and reports
 
Country Commodity Report
Country Sector Report
Global Commodity Report
Trade Assessment
Price Analysis
Comparative advantage
Value Chain Analysis
Custom Consultancy
 
We cover: maize, wheat, rice, barley, millet, sorghum, oats, rye, rubber, sugar, tea, coffee, cocoa, peanuts, cashew, brazil nuts, hazle nuts, edible oils (soya, palm, palm kernel, sunflower, safflower, coconuts, sesame, canola, and cottonseed), coir, jute, sisal, abacca, cotton, hemp, silk, fresh and processed fruit and vegetables, spices, oleoresins and essential oils, cut flowers and ornamentals and mineral water. We also cover sustainable fuels.
 
This gives us a strong background in global production, processing, transport and uses of soft commodities.
 

If you need background information on:

 

·         A soft commodity in a country

·         A soft commodity in global context

·         Country sector Review

·         Custom Research eg export prospects, processed etc.

  

More important is the business orientation of our research. We specialise in market information where the information is not readily available.

 

The Consultancy has by now gone far beyond market research, marketing and distribution. Most of the assignments now are to do with rural development based on thorrough value chain analysis. A lot of the work is still export led. There is also increasing work on processing and processed products.

  

 


   

2

Renewable Energy plus Water Purification

 


 

Vinay Chand is a partner of REEP and increasingly involved with renewable energy because of our long term involvement with coconuts, interest in solving the arsenic poisoning of well waters in Bengal and in membrane distillation purification of water. This involvement brings us to renewable energy through using biomas (coconut husks and coconut shells) for electricity generation and biofuel (coconut oil) for fuel. In turn, the interest springs from the realisation that 90% of coconut husks and shells are not used commercially and many of them could be used to generate electricity. Since we work with coconuts, this use falls within our domain. However, this interest is now broadening to an engagement in all renewable energy aspects.

 

A second aspect comes from water purification. For over 28 years Vinay Chand has been working with Aapo Saask of Scarab AB Sweden who has been developing a water purification technology known as 'Membrane Distillation' which can purify any water completely. However, it does so only by use of energy to heat the water to be purified. Availability of low grade waste heat at a low cost greatly reduces the resulting cost of water purification. The search for waste heat brought us to the idea that we could use biogas power solutions for purifying water, thus more than doubling the revenue stream and making both, biogas and MD more commercially interesting. In any case, combination of technologies now allows:

 

 Biogass digester

 

=

 

 electricity

 +  

heat

+

cooling

+

water

 

Part of the reason why the above has not been developed is that there were no ready markets for the various potential income streams. More than half all energy generated is in the form of heat and most of it is wasted since there are few ready applications. We are lucky in that our interests identify crop drying as one application for waste heat. In the Pacific, for example, cocoa and copra can be dried using that waste heat.

 

Scarab has in recent years been working with the Royal Institute of Technology in Stockholm (KTH) on a platform for polygeneration. Much work remains to be done.

 

Biogass is not the only sustainable energy we are interested in. We are also interested in biomass, solar collectors, waste heat and use of vegetable oil as a diesel substitute. But biogass generation and using waste heat from boilers etc to purify water is a relatively new commitment. It has exciting implications for decentralised rural electrification.

 

The newer renewable energy technologies are growing very fast but they have generally not arrived at commercial viability. Certainly, photovoltaic cells are not viable without strong subsidies and are unlikely to be within the next 5 years. Solar collectors are closer to viability but probably still more than 3 years from viability. Biogas and biomas are viable today but only marginally so. Biogass is not competitive in the most efficient fosil fuel energy plants who can produce electricity at around 2-3 US cents per KWh. Biogass is above 6 cents and mostly above 8 cents. However, in many developing countries the cost of electricity is close to those figures when it is available.

 

By using biogas to generate the heat or generating steam with biomass, the heat can be used with Membrane Distillation to purify water. The revenues from the two systems combined are more than doubled and the combination is viable and profitable. There are further economies where the heat can be used for other commercial purposes. Our interest in coconuts leads to using spare husks for fuel and this appears to be a particulary attractive option on some of the more remote islands, as in the case of the Pacific.In the way of illustration, the heat can be sued for copra or cocoa drying. But there is a general need to dry crops.

 

In Bangladesh, Vinay Chand prepared a proposal now adopted by Grameen Shakti for combining biogass digestors and generators with water purification of wells contaminated with arsenic. Grameen Shakti is a leading developer of sustainable power on a village basis in Bangladesh. They use biodigestors together with solar collectors to generate and sell energy in villages which otherwise do not have electricity. An impediment is that energy is often haevily subsidised making it difficult to develop renewable energy sources. The addition os other cash streams from water and waste heat can make the difference between being and not being viable.

 

In the Solomon Islands, Vinay is helping develop a strategy that may include using coconut oil as a biodisel and using spare husks to generate electricity while purifying water. It makes good sense to combine these different technologies. Use of spare husks to set up small energy units at villages allows a local waste product to bring electricity and spare heat which can be used for copra drying and/or water purification.

 

A major complication is that in many countries electricity is subsidised, directly or indirectly. Renewable means are thus further disadvantaged in establishing viability. Globally electricity rates charged vary greatly from as low as 6 cents per KWh to well over 40 cents.

 

Systems have to be designed in the context of the local situation. In Bangladesh, the subsidised cost of electricity means that renewable energy has either got to be subsidised to the same degree or there have to be other cashflows. In the Pacific, electricity costs are so high that the revenue from selling electricity would provide the main revenue flow. A pilot plant at Port Orly on Santo in Vanuatu, financed by EC, has demonstrated the soundness of the approach and is selling electricity at 10 cents per KWhour instead of the 40 charged by the utility.

 

 


 

Recent Consultancies

 

 

2011   Action fiche for Pacific Regional Coconut Development for the ACP/EC. A project to develop and

          propose pilot grant financed high value coconut projects, the main effort being in Fiji, Papua New Guinea,

          Solomon Islands and Vanuatu but also covering Tonga and Samoa.

 

          Preparing background for next stage of DANIDA Agricultural Sector Development programme for

          Bangladesh. 

 

          Mid Term Evaluation of project for Facilitating Agricultural Commodity Trade (FACT) in the Pacific for the

          EC. Visited Fiji, Solomon Islands, Vanuatu and Papua New Guinea. The project aims to target direct

          assistance to SMEs in commodity exporting and has proven largely successful.

 

2010   Competitiveness of cloves, cocoa, vailla and pepper from Madagascar for EC. Missions to Asia, USA

          and Europe. Madagascar is the leading exporter of vanilla and a major xporter of cloves. The EC is assisting

          the country through a rural development programme of which this forms a part.

 

          Coconut Sector Strategy for Binh Dinh Province in Vietnam, financed by NZAid. A sector strategy so that

          officials can assess if coconuts should be given priority. Part of a capacity development programme by New

          Zealand Aid.

 

          Assistance to Ambassador Group representing the Pacific Region to the European Commission on

          a Regional Capacity Strengthening Programme for Coconut Sector Development. The Ambassadors have

          come to the conclusion that the sector needs prioritisation and there are unallocated funds avilable in the

          Regional allocations of the EC. 

 

          Continued inputs to stakeholder coconut sector strategy development and project formulation in the  

          Solomon Islands for ITC. A Draft Strategy was launched in November. The project has achieved the 

          establishment of a National Coconut Sector Committee and a draft strategy but with no means of

          progressing any further.

     

           Project proposal on aseptic coconut milk plant for Malaita in the Solomon Islands for the Malaita Coconut

           Advisory Committee. Since adopted as part of the sector strategy being promoted by the

           Coconut Committee of Malaita.

 

2009   Global market for and market development potential for coconut husk products, including

          mulch, peat and coir products for GTL as part of a development in south and South-East

          Asia. Through investments in Philippines, Indonesia, Sri Lanka and India, the intention is to produce peat

          from husks that would be sold to high value markets and to process coir into pads and rubberised coir

          products.If expectations are met, GTL will be the largest single producer of coir and peat in the world. GTL

          has commenced operations with a number of acquisitions and is setting up own production.

 

          Participatory strategy development for the coconut sector in the Solomon Islands for ITC

          as part of the EU ACP All Commodities Programme including biomas uss of husks, biofuel use of coconut

          oil, production of higher value products such as milk, water and virgin coconut oil..The value chain based

          approach used is one of participatory strategy formulation by the stakeholders. It is a long process which

          started in the summer of 2009 and will go on beyond the summer of 2010. The emphasis is on the

          strengthening of the capacity to undertake sector strategy.

 

           Supervised 7 sector surveys and analysis in Bangladesh for a IFC study including: seeds,

           fresh and processed fruit and vegetables, garmenting, washing and dyeing, foundries,

           electricals, and poultry. Nearly 100 local consultants were engaged in undertaking the design, testing and

          implementation of surveys, followed up with workshops, key Informant interviews and Focus Group

          discussions, all executed in close coordination with SEDF.

 

           Paper on Food Security at Africa Soft Commodities Conference at London by Cubic Globe. The main

           commodities covered included rice, wheat, maize, cocoa, coffee, oil palm and rubber.

 

           Team Leader/Trade Expert on EC Mission to Egypt to Provide a factual  assessment of ongoing trade

           related cooperation (EC-Egypt) and identify Egypt’s trade and  trade related assistance needs including in

           the area of industrial policy. There was some controversy generated by the Consultants having to chose

           whether to accept what the Egyptian Government was saying or to back the strong reservations by the

           young project manager for the EC.  

 

2008     Value Chain Specialist on Cambodia Agriculture and Agri-business support Programme for Aus Aid to prepare a National Sector Strategy based on value chain analysis of main soft commodities and design of intervention required. The strategy recommended at the end of the day was in line with what policy had been for some time.

 

            Resource speaker with paper on Markets for and Marketing of Jute Geotextiles in a workshop held in Kolkotta by the International Jute Study Group, financed by CFC. The use of jute for geotextiles in the global market has grown far slower than that for other natural fibres like coir.

           

Project Identification study on the potential for Integrated Coconut Processing for high value products and energy self sufficiency as part of an agro-tourism Estate in the Dominican Republic for a private client. A year later the client announced a $2 billion project to develop the region.

 

2007     Agribusiness and Marketing Project, Market Infrastructure Assessment for ABCC of the Kyrgyz Republic and financed by the World Bank. The task was to assess proposals put forward by ABCC, the local party, for a public/private wholesaler/exporter operation for Agriculture in light of rigid dogmatic scepticism on the part of the World Bank Country Officer. The value chains of various soft commodities was covered.

 

Feasibility study on bottling operation for spring and mineral water in Bhutan for ITC

as part of  export oriented capacity building and institutional strengthening.

2006     The Value chains, Market and Prospects for Erosion Control materials in South East Asia including gabions, geosynthetics and biodegradables for European Client intending to establish production in Indonesia. The client is now producing gabions in Indonesia and sourcing geosynthetics within the region.

Preparation of Position Paper for the International Trade Centre on Assistance to Jute/Kenaf, Coir and Sisal Global Industries. ITC has had a long engagement with the three fibres.

Lecture at Seminar organised in Bangkok by the Thai-German Chamber of Commerce on the Export of Fresh and Processed Fruit and Vegetables for the European Commission.

Market Development of traditional and non traditional jute products for private clients who are three leading jute mills in Pakistan. The intention was to use the high level of productivity achieved at the mills to diversify products and markets.

2005     Team Leader/Marketing Expert on Mission to Support Creation of an Intra-ACP Thematic Programme for Implementation of the Plan of Action on Agricultural Commodities and Plan of action for the EU-Africa Cotton Partnership for European Commission. The Action Plan promotes rigorous value chain based analysis commodity based sectoral development strategies through financial contributions to the World Bank, FAO, ITC, UCTAD and CFC to promote coordination in promoting the goals of the Action Plan. A very ambitious assignment. The Report is now being implemented with mixed results. We have learned a great deal from the process of planning the programme to watching how it has been implemented and actually participating in a small part of that. A choice had to be made as to the value chain based approach to sector strategy and emphasis was placed on a participatory rather than top down approach. There is also an element of market driven choice in that beneficiary countries are allowed to chose some of the modules that the 5 organisations offer.Much has subsequently been learned from the experience on value chain analysis as well as on participatory stakeholder workshops.

Moderator and Reporter on developing a global road map for jute financed by CFC, implemented by the International Jute Study Group and workshops held in Geneva, Calcutta and Dhaka by the International Trade Centre (WTO/UNCTAD). The workshops in Calcutta and Dhaka and Geneva were very well attended.What resulted was a development plan for the jute industry that covered production, processing and marketing.

UK supply chains and Marketing and Distribution of Small Electrical Kitchen Appliances for Purity AB. Discussions were held with leading brands in the UK as well as retail chains. An interesting aspect studied were the relative strengths of retail and brands within the value chain.

Global Market Opportunities for high end residential water purification systems for HVR AB and prospects for proprietary Membrane Distillation Technology. Markets covered included the USA and Western Europe for which value chain analysis was undertaken.

Preparation of background technical paper on Biodiversity Promotion Facility for Agricultural Commodities proposal for funding by GEF to be used in preparation of Consultancy Proposal by leading European Consultancy. Commodities covered included coffee, cocoa, cotton, sugar, oil palm, soya, oilseeds, and sugar.

Market development, promotion and sales of first commercial water purification units based on Membrane Distillation technology for Xzero AB.

2004     Mission to look at production, processing and marketing of rubber in Indonesia, Thailand, Malaysia and Vietnam to assist in the Planning for Smallholder Rubber Production and Processing in Cambodia on behalf of AFD. The value chains for rubber in Malaysia, Thailand, Indonesia and Vietnam were examined to provide benchmarks for the Cambodian value chain for rubber.

Assessment and Evaluation of Global Market Opportunities for Jute and Jute Products for the SEDF of the International Finance Corporation/World Bank as assistance to Bangladesh Jute Industry.

Preparation of Conceptual and Technical Material on the identification of Pro-Poor Agricultural Growth-Engines using Commodity Value Chain Analysis in the framework of poverty reduction strategy for Food and Agricultural Organisation of the UN (FAO).

Team Leader and Agribusiness specialist Agribusiness and Commercial Agriculture Assessment for India on a Contract for Asian Development Bank, including analysing current regulatory regime, practices and value chain analysis with a view to promoting agricultural diversification and agribusiness development and a road map for four targeted states followed up by a Loan Preparation Mission from the ADB.

2003     Export Market Prospects for Diversified Agricultural and Agri-Business Products from Cambodia for the International Trade Centre (ITC) WTO/UNCTAD. Produce considered included fruit, vegetables, spices, herbs, essential oils, juices, cashew, coconut milk and mattresses. Presentation of findings to local SMEs as well as the donor community.

Evaluation of NORAD project in Bangladesh to help participating private sector enterprises develop and export diversified value-added jute products. The project has led to product development of a higher quality fabric and products with substantial involvement of poor women working in remote rural locations.

Diversified Agriculture/Agro Business prospects in Cambodia for export led poverty alleviation for International Trade Centre (ITC). Preparation of basket of projects including horticulture, spices, essential oils and agro-processing.

2002     Mission Leader on evaluation of operations and management of the Dambulla Wholesale Fruit and Vegetable Market in Sri Lanka and Business Plan for its possible expansion and privatisation for International Finance Corporation (IFC). Scope of study widened to Development of Horticulture in the Dambulla Region.

2001     Agriculturist on European Commission (EC) Pre-completion Evaluation Mission to Philippines on Agrarian Reform Support Project in 5 provinces: Camarines del Sur; Negros Oriental; and Agusan del Norte and Agusan del Sur in Northern Mindanao. The project provided support in infrastructure, credit and TA to mainly rice, sugarcane; corn and forestry small farmers empowered under land distribution schemes. The evaluation found that participating farmers had indeed greatly increased earnings with the assistance received and that the relative gains were related to certain types of assistance such as primary on farm processing.

Mission on coconut product processing to Comoros for International Trade Centre to identify prospects for use of by-products from coconuts in particular in the form of husks and shells..

Leading Consultancy
 

34 years Consultancy Experience in over 50 countries by Vinay Chand, 40 years specialisation in soft commodities.

 


 Rubber

 

Vinay Chand Associates Clients have included:

 

European Commission, European Development Fund, World Bank Group, Asian Development Bank, International Trade Centre (WTO/UNCTAD), Food and Agriculture Organisation, CFTC, CARICOM, International Jute Study Group. Also bilaterals, including: NORAD, SIDA, AFD, AusAid,

 

National Agencies in Sultanate of Oman, Mexico, Cuba, Kyrgyz Republic.

 

Vinay Chand Private clients have included: Bekaert Steel, British American Tobacco, Wilkinson Sword, Metal Box, Avon Tyres, Pfizer Chemicals, Desarollo Investments in Dominican Republic, Alfa Laval, Tetra Pak, Kulia Investments of Kenya, Scarab Group of Sweden (Xzero, HVR, Purity and MEDEA), Berca and associates in Indonesia, Phoenix Philippines and MCC Investments India. 

 

Reports can be prepared within 48 hours


 Some of the expected uses:

 

1 Preparing a tender
2 Designing a project or strategy
3 Implementing a Prroject
4 Briefing
5 Researchers
 
We welcome corporate access agreements as well as individual purchases.
 
We have Associates who we work with. They include information companies as well as experts.
 
Cereals
 
Farmers, particularly small farmers often have one main commercial or cash crop but their activity usually revolves around a portfolio. a mix of crops and income sources that has to be understood to be able to intervene.
 
An increasing part of the consultancy Vinay Chand Associates has been asked to undertake is no longer concerned with just a single commodity but rather the poverty impact of a mix of soft commodities being produced in the countries that we are asked to help.
 
In looking at potential engines for growth, focus is usually given to the main soft commodity/commodities and these are very often cereals. Maize, wheat and rice are normally important. In most cases, it is simply not possible to substantially replace the main crop but it is possible to reduce the dependence on that crop.
 
Edible Oils
 
In looking at diversification, attention is often given to the potential to increase production of edible oils for domestic consumption as well as for exports.
 
The rate of return per ha for edible oils is much higher than for cereals but the access to markets, critical mass, as well as what is intrinsically possible to grow become determining factors.
 
Prices have been faling over the last decades in real terms in dollars, as they have for most soft commodities. Most producing countries have over the same time devalued against the dollar leading to increasing prices in local currency terms. 
 
Coconut
 
Commercial Crops
 
Commercial crops can be grown on fairly large areas and therefore, represent a valuable way of increasing revenues and for poverty alleviation. They offer the opportunity for undertaking production in relatively large areas.
 
Again, the returns from cocoa, coffee, tobacco, and rubber tend to be higher than mainstream crops but sugar is still greatly favoured although yielding poor results. Ethanol has provided a fillip to sugar production.
 
Research has included examining value chains for rubber products.
 
Edible Nuts
 
Although accounting for relatively smaller areas, edible nuts can be a very valuable component in the mix of crops. Returns from peanuts, cashew, hazlenuts, brazil nuts, pistachio and others can be high and there is scope for some primary processing giving good on farm incomes for farm labourers.
 
Cashew farm in Kampong Chom in Cambodia, Dr Mathew and Vinay on a field visit.
 
Cashew is being grown in a number of countries, including India, Vietnam, Cambodia, Tanzania and Mozambique. The value added by shelling is low but downstream processing, branding, distribution and marketing earn higher returns.
 
Spices, essential Oils and Oleoresins
 
There is normally healthy domestic demand for spices and processing can be fairly rough and ready. There are market restraints when it comes to export potential and spices are not in themselves always high value crops.
 
That raises the possibility of added value when there is critical mass to produce oils and oleresins which command much higher prices. Some are easy to undertake as is the case for lemongrass but others often have a higher value. the basic ones are pepper, chillies but others offer modest scope but valuable returns such as ginger.
 
Pilot lemongrass essential oil production
 
Fruits
 
Fruits represent long lasting crops that yield relatively high value. Mangos in particular have been a popular fruit for high value diversification and fetch good prices when there is a market or the infrastructure to handle for export or processing. But there are many more with Durian commanding best prices but also oranges, apples, apricots, avocados, bananas especially speciality ones, berries, guavas, mangosteens, oranges, peaches, plums and nectarines, etc.
 
Some can yield very fast as is the case with papayas, others take longer to develop as with mangos. Depending on varieties and market access, fruits like cherries, lychee, grapes and cherry tomatoes,
 
It is not enough to grow higher value fruits, there has to be consideration of handling, infrastructure and access to markets.
 
Vegetables
 
A considerable amount of cultivable land is devoted to vegetables. Potatoes and Vegetables come close behind creals in terms of importance. Vegetables vary in returns per ha, cassava is generally low value but with better prices in recent times, with highest value being earned by speciality fungi.
 
The harvesting of crops are often labour intensive which gives good employment prospects for landless labourers as well as part time employment for all.
 
The highest prices often go to perishables like lettuce, but access to markets is necessary.
 
Vegetable post harvest handling is often a neglected area. In normal conditions in developing countries, handling and freight are crude with large losses through wastage. Without a cold chain, export of vegetables tends to be limited.
 
Fibres
 
Vinay Chand has had considerable market and processing experience in jute, coir, sisal and abaca. In recent years this has broadened to cotton, silk, and linen.
 
In particular, we have looked at added value to fibre crops especially in non traditional markets for jute and coir. In 1982 we helped set up a joint venture Sri Lanka-Swedish export oriented rubberised coir plant near Colombo.
 
A large number of studies have been undertaken into current and potential markets for fibres and how the demand is being met.
 
We have helped write the Road Map for Jute,
A Technical Paper by CFC on High Value coir,
Articles in Cococommunity on Coconuts and Coir,
Most recently pre-feasibility in Dominican Republic.
coir husk chips
 
Sustainable Energy
 
Our interest in sustainable energy is increasing to a point where it is quite central to our activities. We have been looking at biogas electricity generation in Bangladesh, the Dominican Republic, India and the Pacific.
 
Biofuel in the form of use of coconut oil as a diesel substitute is also interesting us desoite having resisted it due to the fact that coconut oil is a food item. But the economic argument for cocodiesel is persuasive in certain conditions.
 
Our main interest is in helping make solar power, biogas and solar collectors commercially viable through using waste heat from the process for water purification.
 
Biogas
 
An agreement with Grameen Shakti in Bangladesh is for collaboration in production of electricity and water based on anerobic bio digestors which most often use cow dung but can work on vegetable waste.
 
Association with coconuts led to a desire to make use of some of the 60 million tons of coconut husks not used at present. They can be burnt directly or fed to biodigestors.
 
For burning coconut shells have a far higher BTU and there is the added incentive that shells can be burnt for energy and then the charcoal collected.
 
 

 


 Kerela Beach - coconuts are a Vinay Chand speciality and Kerela means the land of the coconut.
 
 
 
Vinay Chand at Road Map for Jute Dhaka with (left to right) TonySandana of ITC,Gordon MacKie and Nanda Kumar of ISG, now Principal Secretary Ariculture, India.
 
 
Flower Market by Kay Gallwey-Chand (www.kaygallwey.com)
 
CONTACT US
 
If you need information or have a problem with soft commoditites call on us.
 
 
Tel: (44) 20 7794 5977
Fax: (44) 20 7431 5715
 
Vinay Chand, 
230, Finchley Road,
London NW3 6DJ,
UK
 
Why not do a Google Search on Vinay Chand.
 
We cover:
 

 

Cereals


Barley          Maize            Millet

Rice             Wheat          Rye              Sorghum


Edible Oils


Castor         Coconut        Cottonseed

Groundnut   Linsead         Maize

Palm and    Palm Kernel  Rape

Rice Bran   Safflower       Sesame

Soya           Sunflower

 
 

Oil Palm harvesting
 

Edible Nuts


Almonds        Brazil           Cashew

Hazle             Kola             Peanuts

Pecan            Pistachio     Walnut


Spices, Essential Oils and Oleoresins

 

Cardamom    Chilli             Cinamon

Cumin            Ginger          Mustard

Nutmeg          Pepper         Pimento

Saffron          Tamarind      Turmeric

Vanilla

 

Cambodia pepper, Vinay looks on as Dr Mathew explains.

 

Commercial


Cocoa             Coffee          Rubber

Sugar              Tea              Tobacco


Fruits


Apples             Apricots          Avocados

Bananas         Berries            Cherries

Durian             Grapefruit        Grapes

Guavas           Jackfruit           Kiwi             

Lemons          Limes              Lychee         

Mangos           Mangosteens   Melons         

      Nectarines      Oranges           Papayas      

      Peaches          Pears              Pineapples    

Plantins            Plums             Pomelos      

      Quinces           Rambuttans   Tangerines    

Tomatoes        Watermelons 

 

Fruit Juices

 

Orange             Apple              Mango

Guava               Pineapple       Grape

Lemon              Lime               Mixed


Vegetables


Artichokes      Asaparagus    Bok choy

Broccoli         Broad beans   Cabbages

Carrots          Cassava         Celeriac

Cauliflower    Cellery             Cucumber

Garlic             Green beans   Gourds

Lettuce          Mushrooms     Okra

Onions          Peas                Potatos

Sweet potato Shallots           Swedes

Taro               Tubers            Spinach

Turnips


Hard Fibres and Jute


Abaca             Coir                Hemp

Jute                 Kenaf             Sisal


Fibres


Cotton             Ramie            Linen

Flax

 

Sustainable Energy

 
       Biogas              Biomass          Biofuel
       Solar Power      Wind power
 
But not all can be covered in every country. In particular dis-aggregated data on fruit and vegetables is not readily available in many countries and not at all in some.
 
 
Renewable energy is receiving greater attention today although most of the major sources rrely on subsidies in one form or other. However, biodigesters are viable where there are no subsidies on electricity rates or in the format of co-generation. 
 
 
 Biogass production
 
Selected coverage on Cambodia, Cameroon, Fiji, and Egypt and on Cereals, Cocoa, Coconuts, Rice, Edible Oils, High Value Crops, Jute and Hard Fibres and Rubber. Please click on pages to access.