Malaysia’s role in the cocoa industry is often overshadowed by the giants in West Africa or even their cousins in Indonesia. In fact, according to different estimates, they are either the 5th or 6th biggest cocoa processor in the world and the second-largest in Asia.
But Malaysia has a different approach to cocoa, with a focus on production rather than growing. Indeed, this is borne out in the contributions GDP makes to agriculture, with Malaysia, at 7.1% of GDP from agriculture, compared to 13.7% for that of Indonesia.
The cocoa farming industry by contrast is tiny with only 5,200 farmers and estimated production of a meagre 1,000 tonnes, putting it firmly in the specialist category.
That is starting to look like a smart decision considering the problems associated with growing the crop. Indonesia’s cocoa output has been steadily falling and last year they produced 200,000 tons, about a third less than they achieved in 2016/17.
Malaysia by contrast over the same period has grown their grinding output from 216,000 tons to a projected 335,000 tons this year.
With the market for chocolate in Asia forecast to grow, Minister of Plantation Industries and Commodities in Malaysia Datuk Zuraida Kamaruddin smells an opportunity. She wants to see the country become the de facto hub for ASEAN grinding and distribution.
We will take a look at the potential for bringing in foreign investors to start a factory or chocolate factory and make this hub a distribution centre to ASEAN and other countries. – Ms Kamaruddin, Minister of Plantation Industries and Commodities
Ms Kamaruddin is smart to take this approach. Although interest rates might rise, currently, they are still low enough to make investors want to put their cash to work.
In evidence of this, the Cocoa Association of Asia’s latest Asia Grind numbers shows Q2 performance at record levels.
Malaysia has a track record, 8 federally administered ports, including the well-positioned Port of Tanjung Pelepas which is also where the cocoa trading happens and is well suited to take advantage of the growth prospects in the region.