Govt allots RM9.5mil to boost cocoa production

KUALA LUMPUR: Malaysia, which is among the world’s top five exporters of cocoa powder, is seeking to reduce its reliance on bean imports and boost its cultivation in an effort towards developing made-in-Malaysia chocolate brands.

The government has provided an allocation of RM9.5mil to revitalise cocoa cultivation in 2,126ha of land in the country, said Deputy Plantation and Commodities Minister Datuk Chan Foong Hin.

He said Malaysia has been importing cocoa beans from countries such as Ivory Coast, but intends to reduce its dependence on such imports.

He added there was a deficit in cocoa powder exports last year due to currency exchange rates and a decrease in production.

In an interview, Chan said the RM9.5mil allocation is significant as it is aimed at assisting and empowering cocoa farmers, paving the way for Malaysia to achieve self-sufficiency in chocolate production.

High hopes: Chan says that he believes the RM9.5mil allocation can strengthen Malaysia’s position in the global cocoa market.High hopes: Chan says that he believes the RM9.5mil allocation can strengthen Malaysia’s position in the global cocoa market.

Acknowledging the challenges faced by cocoa farmers during the pandemic, he was, however, optimistic about the future.

“With the aid provided and the adoption of modern farming techniques, I believe Malaysia can overcome obstacles and strengthen its position in the global cocoa market,” he added.

By the end of 2023, cocoa prices surged as the world supply had depleted due to the prolonged impact of climate change, as well as plant diseases in Africa.

Ivory Coast and Ghana, the world’s largest cocoa sellers, have faced extreme weather conditions in recent years.

Based on foreign reports, global cocoa prices rose steadily last year and have already doubled in 2024.

Bean prices have soared to unprecedented levels, with wholesale prices in New York rising by over 47%, reaching US$8,900 (RM42,140) per tonne in recent weeks.

Chan acknowledged that cocoa farmers abandoned cocoa cultivation even before the pandemic and moved to other crops because of serious pest issues and tree diseases.

He said the government hoped smallholders would consider re-engaging in cocoa cultivation with the allocated aid.

“The RM9.5mil assistance is primarily aimed at farmers registered with LKM (Malaysian Cocoa Board). We hope they will return to cocoa cultivation,” he said.

To increase cocoa bean production, Chan said there would be agricultural input incentives and modern farming techniques promoted through LKM.

Cocoa production in Malaysia has not been significantly affected by climate change in recent times.

However, an LKM study found that prolonged temperatures exceeding 36°C or rainfall of more than 2,500mm could negatively impact cocoa production.

From 2019-2023, the cocoa sector’s contribution to Malaysia’s GDP increased by an average annual rate of 7.2%.

Last year, cocoa exports were valued at RM8.2bil, compared with RM7.8bil in 2022. The main contributor of exports are cocoa butter, cocoa powder and chocolate.

Cocoa plantations spanned 6,123.07ha and there were 5,317 cocoa farmers last year.

Cocoa bean production was less than 500 tonnes, causing cocoa grinding factories to depend solely on RM6.8bil worth of imported beans.

According to Euromonitor International, more than 80% of the chocolate market in Malaysia is taken up by international chocolate and cocoa companies such as Nestle (M) Sdn Bhd, Mondelez (M) Sales Sdn Bhd, Ferrero SpA, and Mars Food (M) Sdn Bhd.

A smaller percentage comes from local chocolate and cocoa confectionery companies such as Network Foods Industries Sdn Bhd, Maestro Swiss Chocolate Sdn Bhd and Beryl’s Confectionery & Chocolate Sdn Bhd.

LKM is targeting a cocoa product export value of RM9bil this year, to increase to RM10bil next year.

The export value of cocoa products has been going up – RM8.21bil last year compared with RM7.82bil in 2022 and RM6.87bil in 2021.

It was about RM5.55bil in 2018.

In 2021, Malaysia’s cocoa product export market penetrated 107 market destinations worldwide.

This went up to 176 destinations in 2022, followed by more than 250 destinations last year.

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