AFTER countless write-ups on palm oil, I thought it time to diversify before readers accuse me of monocropping my write-ups. So this week, let us leave the palms and talk about another Malaysian agricultural story – cocoa.
My first encounter with cocoa was not wrapped in foil. It was under the hot Selangor sun, in my grandfather’s kebun in Telok Panglima Garang, where cocoa trees grew between coconut palms – cocoa below, coconut above, everybody sharing the same tropical real estate without requiring a consultant to call it agroforestry.
As a boy, I would split open the colourful pods and discover something that looked nothing like chocolate. Inside were beans wrapped in sticky white pulp.
Later, they would be laid on guni sacks to dry, carrying an earthy, sweet and slightly fermented smell – chocolate before chocolate knew it would acquire a wrapper, a brand and a higher price.
Years later, cocoa crossed my path again in Sabah. In the early 1990s, I was at Segaliud Estate in Sandakan, when Malaysia’s cocoa boom was fading and oil palm steadily taking over.
The old cocoa factory had found another purpose: we converted it into a badminton court.
Where beans had once been handled, planters now smashed shuttlecocks after work, although that faint fermented cocoa aroma still clung stubbornly to the building.
I did not realise it then, but our badminton court was telling a much bigger Malaysian agricultural story.
The cocoa trees were disappearing, but the cocoa industry, curiously, was not. Cocoa, I learnt, never really leaves you; it just changes form.
How chocolate got here
Cocoa had travelled a long way before reaching my grandfather’s kebun.
Theobroma cacao originated in the tropical Americas, where Mesoamerican peoples cultivated, traded and consumed cacao long before Europeans encountered it. It was valued in ritual, society and commerce.
Europe later added sugar, machinery, branding and mass marketing.
Over centuries, a bitter cacao drink became the chocolate we recognise today, travelling from ritual to aristocratic indulgence and eventually into ordinary hands. Chocolate became, in a sense, democracy in a wrapper.
Malaysia’s cocoa story is commonly traced to Malacca in the late 18th century, although those early trees were more botanical curiosity than commercial proposition.
Commercial planting came much later, and cocoa’s Malaysian destiny eventually pointed east to Borneo, particularly Sabah and Tawau.
By the 1970s and 1980s, cocoa had become an important part of Malaysia’s agricultural diversification.
Estates planted, smallholders followed, researchers got busy and fermentation boxes filled. When cocoa prices were attractive, the crop looked remarkably clever, as agriculture usually does when prices are rising.
There was money in the pod
The expansion was extraordinary. Malaysia had about 123,855 ha under cocoa in 1980, but nine years later the area had more than tripled to a record 414,236 ha.
Sabah alone accounted for 205,260 ha in 1989, almost half the national cocoa area.
Production followed. Malaysia produced 36,500 tonnes of cocoa beans in 1980, reached 230,000 tonnes in 1988 and peaked at 247,000 tonnes in 1990. Sabah supplied 145,000 tonnes of that peak output.
For a country with relatively little commercial cocoa only a few decades earlier, it was quite an agricultural transformation.
But statistics have a habit of making farming sound easier than it is.
Cocoa pods do not conveniently ripen according to management calendars. Fields must be walked repeatedly, pods harvested carefully, beans removed, fermented, dried and graded.
Pests must be controlled, trees pruned and workers available.
Still, there was money in the pod, and whenever there is money in a crop, everybody suddenly remembers having believed in it from the beginning.
Then came trouble – some with wings, some wearing price tags.
When biology met economics
The cocoa pod borer became one of Malaysian cocoa’s most troublesome pests.
Its larvae damage developing beans inside the pod, reducing yield and quality while making crop management more demanding.
But it would be too convenient to blame one small insect for such a large decline. Cocoa prices weakened during important periods, labour requirements were high, production costs rose and good management mattered.
At the same time, another crop was standing nearby with a persuasive commercial proposition: oil palm.
Growers and plantation companies may love agriculture, but they are rarely sentimental when the numbers stop working.
Land moved into oil palm, cocoa blocks disappeared and
Malaysia’s cocoa landscape changed dramatically.
From more than 414,000ha at the 1989 peak, the industry was down to only a few thousand hectares by the early 2020s.
My badminton court at Segaliud was therefore more than an amusing plantation anecdote. It was agricultural economics written in court lines: where beans once fermented, shuttlecocks flew.
One might reasonably expect the rest of Malaysia’s cocoa industry to have followed the trees into history. Instead, something unexpected happened.
When Malaysian bean production peaked at 247,000 tonnes in 1990, domestic cocoa grinding stood at only 70,000 tonnes.
By 2000, grinding had almost doubled, and by the late 2000s it had passed 300,000 tonnes.
In 2023, Malaysia ground about 370,000 tonnes of cocoa. There was one obvious problem: we were no longer growing anything remotely close to that amount, so the beans increasingly came from elsewhere.
Malaysia imported cocoa beans and transformed them here into cocoa liquor, butter, powder and other ingredients for food and chocolate manufacturers.
While our cocoa fields contracted, our processing capability expanded. We went from grower to grinder.
The plantations shrank, the factories stayed, and Malaysia became rather good at processing cocoa at almost exactly the same time that we became remarkably good at not growing it. That is where the story becomes particularly Malaysian.
When everyone makes the right decision
Malaysian bean production had fallen to hundreds of tonnes and imports risen to hundreds of thousands, while our grinders were processing more than 315,000 tonnes.
Nobody deliberately designed this outcome. Plantation companies quite rationally moved land from cocoa into more profitable oil palm, processors imported beans to keep factories
running, policymakers encouraged downstream investment and value addition, while researchers continued improving varieties, pest management and processing.
Everybody could be right individually, yet collectively we arrived somewhere nobody particularly planned: a substantial cocoa-processing industry with hardly any Malaysian cocoa left to process.
That is the paradox. But it is important not to turn a fascinating story into the wrong conclusion.
There is nothing inherently wrong with Malaysia importing cocoa beans. International trade exists precisely because countries do not have to produce everything they process, and our grinders should source beans wherever quality, availability and economics make sense.
Indeed, Malaysia’s ability to retain and expand cocoa processing after domestic production collapsed should be recognised as an industrial achievement, not simply an agricultural failure.
We moved downstream, added value and built expertise and processing capacity rather than allowing the entire industry to disappear with the plantations. That was clever.
The more interesting question is what happens if the distance between farm and factory becomes too great - not geographically, but in capability.
When agricultural production almost disappears, we lose more than tonnes. Growers lose experience, planting materials
become less widely used, fermentation skills fade, breeding populations shrink and researchers have fewer commercial fields in which to test ideas.
Factories and farms also run on different clocks. A processing plant can increase throughput quickly if beans are available, while agriculture runs on biological time: trees must be planted, planting materials multiplied and farmers persuaded that somebody will still want their crop several years later.
You cannot order 100,000ha of mature cocoa trees online and request next-day delivery.
So the question is not whether Malaysia should grow all the cocoa it processes. Clearly, it need not.
The better question is whether allowing domestic production to fall to almost nothing is really the best long-term outcome.
Not more cocoa. Better cocoa
That does not mean returning to large hectarage. Trying to recreate the cocoa boom of 1989 would be nostalgia masquerading as agricultural policy.
Land economics have changed, labour is scarcer and cocoa remains a demanding crop. History is worth remembering, but it is not a business model.
There is, however, considerable space between recreating yesterday’s boom and allowing domestic production to become a historical footnote.
Perhaps the opportunity is a smaller, smarter and higher-value Malaysian cocoa industry. Instead of asking how many tonnes we can produce, ask a different question: how much value can Malaysia create from every Malaysian bean?
That shifts attention towards genetics, agronomy, careful fermentation, traceability, flavour and origin.
Coffee has learnt to sell not merely coffee but place, variety and story, while wine practically built a civilisation around the idea. Chocolate can do the same.
Malaysia is not going to challenge Côte d’Ivoire or Ghana through sheer volume, nor should we try. But perhaps Malaysian cocoa can compete through something harder to measure by the tonne: identity. Not more cocoa. Better cocoa.
From commodity to chocolate
There are already signs that this middle ground need not remain theoretical.
In Sabah, companies such as Benns Ethicoa and Cocoa Kingdom are working with locally grown cocoa in bean-to-bar models, bringing the bean, its origin, processing and finished chocolate closer together.
These ventures do not signal the return of Sabah’s great cocoa boom, nor should that be the objective.
They suggest something more interesting: Malaysian cocoa may return not as a mass commodity, but as a differentiated product whose value comes partly from where and how it was grown.
Tawau has history, Sabah has the agricultural memory, and Malaysia has cocoa research capability and a sophisticated downstream industry. Perhaps the next opportunity is to
connect those dots.
There is one stubborn reality no premium wrapper can overcome: the farmer must make money.
We can discuss specialty chocolate, terroir, traceability and sustainability until the chocolate melts, but somebody still has to walk into the field, prune the tree, manage pests and harvest the pod.
If that person cannot earn a reasonable return for land, labour,
management and risk, cocoa will disappear again.
Malaysia has already learnt that growers change crops when economics change. They will not behave differently merely because somebody further down the chain has discovered a
beautiful story for the packaging.
If Malaysian cocoa commands a premium, enough of that value must find its way back to the person growing the bean. And perhaps that is the wider lesson of our cocoa paradox.
Downstreaming has served Malaysia well. Rubber moved into gloves and engineering products, palm oil into refining, specialty fats and oleochemicals, and timber into furniture and engineered products. Creating more value from what we produce is sensible economics.
But moving downstream need not mean forgetting upstream. The healthiest value chain may be one in which the factory and the farm still know each other exists.
Which brings me back to my grandfather’s kebun and that old cocoa factory in Segaliud.
As a boy, I watched beans drying on guni sacks without imagining Malaysia would become an important cocoa producer.
As a young planter, I played badminton where cocoa beans had once been handled without imagining that decades later Malaysia would still be grinding large tonnages of cocoa - except that very little would come from Malaysian trees. The crop left. The industry stayed.
That was neither simply failure nor unqualified success. It was adaptation and perhaps an unfinished story.
Malaysia’s next cocoa chapter need not bring back yesterday’s boom. It may simply bring farm and factory a little closer together: imported beans where they make economic sense, Malaysian beans where quality and identity create value, and enough domestic cocoa to keep knowledge, research and opportunity alive.
Go downstream, certainly, but remember to look back occasionally, because someone still has to plant and manage the tree.
And somewhere beneath the memories of that old badminton court in Sandakan, I can almost smell those fermented cocoa beans again.
Cocoa may have faded from our fields, but it never quite left Malaysia.
Joseph Tek Choon Yee has over 30 years of experience in the plantation industry, with a strong background in oil palm research and development, C-suite leadership and industry advocacy. The views expressed here are the writer’s own.
