Govt allocates RM9.5m to revitalise cocoa projects

THE government will allocate RM9.5 million for a new cocoa plantation project and a cocoa farm recovery project. 

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani revealed that the new cocoa plantation will span 350ha, while the cocoa farm recovery project will cover 2,126ha.

“When the smallholders (the farmers) benefit from replanting projects, I hope the country’s cocoa exports will strengthen because we no longer need to import cocoa from other countries,” he said.

He added that Malaysia has great potential to integrate into the global cocoa market, which is currently highly dependent on a few cocoa-producing countries worldwide. 

As such, he stressed that the government is committed to revitalising and enriching the cocoa industry.

“It is our task to re-energise the upstream and downstream sectors ensuring that our approaches not only increase income generation but also instil environmental stewardship among our communities,” he highlighted.

Johari is confident that the cocoa industry has immense potential to generate high income for the country’s economy, noting that this is supported by two main factors.

Firstly, Malaysia is among the major players in the global cocoa market, especially in the midstream and downstream sectors. 

In 2023, 7% or 370,207 metric tonnes (MT) of cocoa beans were processed in Malaysia, making our country the fifth-largest processor in the world, after Ivory Coast, the Netherlands, Indonesia and Germany.

The cocoa industry also contributed RM8.2 billion to the country’s export revenue. 

However, this figure does not paint a complete picture because Malaysia is a net importer of cocoa. 

In 2023, Malaysia produced only 270MT of cocoa beans while importing 533,000MT.

“Local production is insufficient to meet industry demand. Imported cocoa beans are processed for export purposes or to produce cocoa products,” he disclosed.

According to him, the second factor indicating the significant potential of the cocoa industry is the high cocoa prices.

Cocoa bean prices have surged by 200%, from around RM9,000 per MT in 2023 to over RM28,000 per MT in April 2024. 

According to the International Cocoa Organisation (ICCO), these prices are expected to remain high and stable for the next two to three years.

Cocoa has the potential to provide substantial returns to approximately 5,317 small cocoa farmers, who cover 89% (5,445ha) of the cocoa cultivation area in Malaysia. 

“I strongly encourage small farmers to seize this opportunity to increase Malaysia’s cocoa production and, at the same time, generate income,” Johari said, stressing the importance of innovative initiatives in addressing industry challenges. 

“Malaysia was once a thriving cocoa-producing nation, and there are vast opportunities for us to incorporate technology and product innovation to elevate our production levels,” he added.

He acknowledged efforts such as Nestlé (M) Bhd’s support for Borneo growers in improving their lives and product quality through the company’s sustainability plan are crucial.

The Malaysian Cocoa Board (LKM) will oversee the implementation of these projects and assist smallholders in overcoming any issues related to cocoa cultivation.

As part of its continuous initiative to localise its ingredient sourcing, Nestlé yesterday introduced KitKat Dark Borneo, crafted solely from cocoa beans cultivated in Sabah and Sarawak.

Its CEO Juan Aranols said the launch is part of its commitment to advancing local and sustainable sourcing through Nestlé Malaysia’s Farmer Connect programme, which has now expanded into Sabah and Sarawak. 

He added that the company’s approach includes implementing regenerative agriculture practices like agroforestry and intercropping, which help maintain soil health in the long run and increase crop yields, thus boosting local farmers’ income.

“We believe that KitKat Dark Borneo, in addition to being a great tasting and high-quality confectionery, is a great example of how private-public partnerships can bring about positive change and improved opportunities for economic development for local communities,” he said.

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