International Cocoa Organization (ICCO) | October 2015

Cocoa Production in the Asia-Pacific Region

Asia-Pacific Regional Cocoa Research Workshop

Davao, The Philippines, 12-15 October 2015

Daily QKCc1 21/09/2005 - 29/08/2014 (NYC)

VltyOHLC, QKCc1, Trade Price, 0.0, 10, 365.0

05/01/2010, 22.93

BarHL, QKCc1, Trade Price

05/01/2010, 142.70, 140.40, +2.45, (+1.79%)

BBand, QKCc1, Trade Price(Last), 20, Simple, 2.0

05/01/2010, 149.64, 142.35, 135.06

Value

USc

Lbs

Auto

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

260

270

280

290

135.50

55.74

146.00

125.19

104.39

248.94

O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Tue 05/01/2010

1

International Cocoa Organization (ICCO) | October 2015 Source: ICCO

Regional Cocoa Production (thousand tonnes)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Th

ou

sa

nd

to

nn

es

Africa America Asia

2

International Cocoa Organization (ICCO) | October 2015 3

0

100

200

300

400

500

600

700

800

Indonesia Malaysia Papua New Guinea Others

Th

ou

sa

nd

to

nn

es

El N

iño

El N

iño

El N

iño

Asia-Pacific production: country contribution

El N

iño

Note: only selected El Niño events are reported in the chart

International Cocoa Organization (ICCO) | October 2015 4

72% 18%

10%

Production: regional distribution

Americ

Asia & Oceania

Africa 80% 1%

10%

8%

Production: Asia-Pacific region

Indonesia

Other

Malaysia

PNG

Asia-Pacific cocoa production: situation in 2014/2015

Indonesia 350.0

Papua New Guinea 42.0

India 16.0

Malaysia 6.5

Vietnam 6.0

Philippines 5.5

Solomon Islands 5.0

Vanuatu 2.0

Sri Lanka 0.5

Thailand 0.4

Fiji 0.1

Other Asia and Oceania 1.0

Cocoa production, in

thousand tonnes

International Cocoa Organization (ICCO) | October 2015

Source: ICCO

Growth in Cocoa Consumption

3536

2444

1091

288 117

362 229

794

325

1421

4004

2612

1392

434

153

446 257

855

359

1500

0%

10%

20%

30%

40%

50%

60%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2008/09 2013/14 % Increase

+7%

28%

51%

31%

23%

12%

8%

10%

6%

+13%

tho

usa

nd

to

nn

es

5

International Cocoa Organization (ICCO) | October 2015 6

Net exports of beans & products (in 2013/14)

Bean

s

Bu

tter

Po

wd

er &

ca

ke

Paste

/ liqu

or

To

tal

- 45

5,2

19

- 37

,46

1

+ 4

7,4

92

+ 1

53

,82

7

- 29

1,3

61

Asia as a net importer of cocoa

International Cocoa Organization (ICCO) | October 2015

Main factors influencing cocoa production and farm profitability

Business environment • Ease of doing business

• Regulations and taxation

• Infrastructures

• Qualified labour availability and cost

• Policy support to the cocoa sector

Agronomic factors • Farming system used (from agroforestry model to intensive, productivity-orientated model,

often without shade of any kind (full-sun)),

• Level of farm crop diversity

• Variety of the cocoa used: yield, resistance to pests and diseases, quality traits

• Age of the trees

• Level of husbandry – Good Agricultural practices

• Use of inputs (labour, use of phytosanitary products and fertilizers)

• Weather condition

• Presence of pests and diseases

Economic factors • Price of cocoa beans

• Cost of inputs

• Country economic growth / shift towards upstream activities

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International Cocoa Organization (ICCO) | October 2015

Main factors explaining the decline of the Asia production

Business environment

• Qualified labour availability and cost

Agronomic factors

• Age of the trees

• Presence of pests and diseases (VSD, black pod, pod borer)

Economic factors

• Price of cocoa beans

• Competition for inputs (labour, land, financing) from other crops (palm oil, rubber, etc.)

• Country economic growth / shift towards upstream activities

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“After initial forest conversion to

cacao agroforests, sustaining

production is difficult due to

dwindling yields as trees age and

pest and disease pressure

increases”.

Francois Ruf, 2009

International Cocoa Organization (ICCO) | October 2015

Recommendations for a way forward

1. Develop national strategies, in a transparent and inclusive manner (PPPs)

2. Improve coordination of programmes implemented in the region: role of PPPs

3. Increase efforts to control pests & diseases • SPS “Capacity Building and Knowledge Sharing in SPS and Food

Safety in Cocoa in South East Asia (September 2013 – March 2016).

• 3rd Edition: Manual on “Pesticides Use in Cocoa”.

• Indonesia (ICCRI) / Malaysia (MCB) / Papua New Guinea (Cocoa Board of PNG) to develop a draft programme, with technical assistance of CABI & supervision of ICCO – Existing initiatives to be taken into consideration.

• Programme to be reviewed by PPPs (or alternatively industry & governments)

• Funding from governments, industry & development agencies.

9