Cocoa, a key contributor to Malaysia's economy, has shown robust performance in 2024 driven by higher global demand and the government's support, and has recorded notable increases in export this year, reported Bernama Dec 25 based on information from the Ministry of Plantation and Commodities.

Export earnings from cocoa bean and products rose significantly, reaching RM12.09 billion from January to October 2024, compared to RM8.20 billion in the corresponding period last year, according to the Malaysian Cocoa Board (MCB).

The MCB highlighted that one of the main drivers of the positive performance of cocoa in 2024 was the significant rise in cocoa bean prices, ranging from RM20,000 to RM27,000 per metric tonne – more than double the average price of RM10,000 per tonne last year.

This price increase has sparked renewed interest among estate owners and smallholders in cocoa planting, prompting efforts to rehabilitate existing cocoa fields in order to boost production.

With the consumer preference for premium chocolate, the demand for cocoa-based products will remain high despite the higher prices.

However, the cocoa-based industry relies heavily on imported cocoa bean, as 99% of cocoa bean processed by local grinders are imported, valued at RM12.6 billion for the first nine months of 2024.

The MCB has launched a bean-sourcing mission earlier this year to address this dependency issue.

Additionally, the European Union Deforestation Regulation (EUDR) has prompted the MCB to collaborate with Malaysia Space Agency (MYSA) to utilise geospatial data and remote sensing technology to enhance the monitoring of cocoa plantation.

On foreign exchange (forex) fluctuation, the ministry highlighted that a stronger ringgit could lower the cost of importing inputs, thereby lowering production expenses for smallholders and increasing their profit margins.

However, changes in forex have a limited direct impact on smallholders' income, as small-scale cocoa plantation supports primarily the domestic market to meet the demand of local processing factories.