Malaysia cocoa output falls, area to stabilize

Malaysia cocoa output falls, area to stabilize

KUALA LUMPUR (Reuters): Malaysia's cocoa production in 2000 fell 16 percent from the previous year to a 70,262 tonnes owing to smaller plantation areas, low prices and labor woes, the Malaysian Cocoa Board (MCB) said.

Production has been falling steadily for several years, but areas are expected to stabilize at current levels this year, the MCB said in a report obtained on Friday.

The volume of cocoa ground in Malaysia -- the world's eighth largest grinder -- rose 26.3 percent to 139,443 tonnes in 2000 because of strong demand for powder and an expansion of capacity.

"Continued reduction in area was largely attributed to low prices, high input costs and labor problems. However, in 2001, cocoa area is expected to stabilize...and any reduction will be marginal," the MCB said.

The country had to import a large amount of beans to meet the demand from grinders because of the local supply deficit.

"To meet domestic shortfalls in supplies, a significant volume of cocoa beans had been imported mainly from Indonesia and Papa New Guinea, turning Malaysia into a net cocoa importer."

Malaysia imported 90,300 tonnes of cocoa beans last year compared with 51,709 tonnes in 1999.

"In 2000, Malaysia was the eighth largest cocoa grinder accounting for 3.9 percent of total world grindings and the third largest origin processor after Ivory Coast and Brazil," it said.

The MCB said cocoa plantation areas stood at 77,769 hectares in 2000, down 22.9 percent from the previous year.

The board revised down the total area for 1999 to 100,803 hectares from an earlier 115,816 because the area felled was much higher than predicted.

Malaysia, the world's largest palm oil producer, depends on foreigners, mainly from neighboring Indonesia, to work the plantation areas.

Cocoa prices in New York hit a 27-year low of $790 a ton last August. Prices have gradually recovered and were quoted at $1,052 a ton for spot May in New York on Thursday.

Malaysia's dry cocoa production has shown a downward trend for nine consecutive years, said the board.

"However, there was an improvement in productivity where the national average yield increased to 903 kg/ha, 8.8 percent higher than the previous year.

"Being a perennial crop, any increase in production will be gradual and depend on prices," it said.

The increase in national average productivity was attributed to rehabilitation of existing cocoa areas and removal of abandoned cocoa areas, it said.

Malaysia's earnings from exports of cocoa beans and products reached 443.7 million ringgit ($117 million) in the first nine months of 2000, down 21.3 percent from the same period in 1999.

Malaysia exported 6,782 tonnes of raw cocoa beans in Jan/Sept 2000, down 68.9 percent from the same period in 1999 because of lower production and more beans being processed locally.

Cocoa butter exports reached 31,632 tonnes compared with 28,656 tonnes in the same period in 1999, while unsweetened cocoa powder exports totaled 23,670 tonnes, up just slightly.