Kuala lumpur: Globally, the increased interest in cocoa butter equivalents and cocoa replacements has spurred demand for specialty fats and palm-based products.
This is not surprising. In the last few years, the price of cocoa has been extremely volatile as the market was hit by both supply shocks and demand destruction.
Prices stood at about US$5,360 per tonne in the first week of July, nearly doubling from their late February-lows.
It’s worth noting that more than 70% of commercial cocoa is grown in West Africa.
Weather problems, disease pressure, and weak harvests have all tightened availability after years of deficit in that region.
And because cocoa is so concentrated in those few parts of the world, when output slips, the whole global market reacts.
For Cargill, a global food and agriculture company, the disruptions prompted the group to rethink how it could work more closely with customers on sourcing, production, formulation and application support.
Cargill initially began in the grain business before diversifying into cocoa and other fats. To mitigate the cocoa disruptions, expanding its edible oil plants amidst growing demand was one way to avoid complete dependency on it.
The group recently announced it will expand its plant in Port Klang, with a new specialty fats production line aimed at strengthening solutions for chocolate, bakery and dairy applications.
The latest expansion builds on a US$20mil investment the group made in the facility in 2020, which strengthened its manufacturing and technical capabilities to support innovation.
Six years later, Cargill is doubling down on the site as it sees further potential in the specialty fats market.
Kashan Rashid, vice-president and managing director, Cargill’s Food South-East Asia, Australia and New Zealand, said the facility will enable palm oil processes while producing a broader and more versatile range of output.
These include cocoa butter equivalents, low-trans fatty acid cocoa butter replacers, and specialty fats across multiple application categories.
“The continued and multi-year investment in Port Klang since 2020 signals Cargill’s commitment to strengthening capabilities that support customers’ evolving product and application needs across these markets,” he told StarBiz.
While the expansion is expected to bring about a production capacity uplift, Kashan said he cannot provide a specific volume figure at this point, only that the investment is designed to give the group greater flexibility to serve a wider range of customer needs across the region than was previously possible.
“Each investment has been driven by a specific capability objective – first, modernising operations, then expanding into multi-stage palm fractionation to serve the growing specialty fats needs of customers across Asia Pacific and the Americas.”
According to him, the continued investment reflects shifts in the ingredient market and growing customer demand for greater formulation flexibility.
Now, Cargill’s global footprint spans across 70 countries, but Kashan said Malaysia, specifically, has been important to the group because it provides a well- established palm oil and food manufacturing ecosystem, an experienced talent base, and strong logistics connectivity.
Notably, Malaysia is home to two of Cargill’s edible oil facilities that supply customers across Asia Pacific, Europe, the Middle East and Africa.
“What makes Port Klang significant is that it is the first facility within Cargill’s global edible oils network to deploy this specialty fats processing technology.”
Kashan explained that the transformation of the Port Klang facility is ongoing.
The facility also has a lipid research and development centre that allows customers to access Cargill’s oils and fats expertise and pilot capabilities.
“This means Port Klang is now positioned to support customers not just on supply, but on formulation development, ingredient performance and application complexity – which points to a higher- value innovation partnership we provide to our customers from here,” he said.
Looking ahead, Kashan expects demand for cocoa butter equivalents and replacements to continue growing, particularly in the region, as the Asia-Pacific chocolate market expands. Its share of the global chocolate market is projected to rise from 19.6% in 2025 to 22% by 2030.
Kashan said this growth is supported by rising incomes, urbanisation, and evolving consumer preferences, driving demand for chocolate, as well as bakery products such as pastries and other baked goods.
He said customer conversations typically do not revolve around one single factor, but rather a combination of considerations. “Customers may consider different formulation options, and so as a comprehensive food ingredients provider, Cargill works across cocoa and chocolate, specialty fats, sweeteners, texturisers and broader food applications.
“This breadth enables us to support customers with different product and business needs, and to help them evaluate formulation options based on their category, market and intended consumer experience.”
At the same time, cocoa remains highly relevant for many products because of its taste, sensory profile and consumer appeal.
“Beyond cost pressures, the right formulation approach depends on the specific product application and market requirements, including product performance, quality, taste and regulatory compliance.”
Kashan expects that the demand for food will continue to grow, with the global population projected to reach nearly 9.6 billion by 2050.
“Food systems face sustained volatility from weather, geopolitics and demand shifts. With 15 countries producing about 70% of the world’s food, connected supply chains act as shock absorbers and help move food from where it’s grown to where it is needed, even during disruptions.
“The vulnerability of any regional food system is therefore a function of how well-connected and diversified its supply chains are, not just how much it produces domestically,” he added.
Kashan said Cargill will continue evaluating opportunities to strengthen its operations, capabilities and customer offerings.
“Resilience has moved from a risk management consideration to a core business requirement, and diversified sourcing, formulation flexibility, and reliable ingredient partnerships are increasingly important.
“Cargill’s global supply chain network helps keep food moving from where it is grown to where it is needed and find alternatives when supply is disrupted.”
