Sabah is the major cocoa producing State in Malaysia. In 1998, more than 70% of the total production of cocoa beans in the Malaysia comes from Sabah. Despite the large presentation of cocoa cultivation in Sabah, there have been a gradual reduction in production attributed mainly to the increasing conversion of cocoa cultivated land into oil palm cultivation.

Most of the cocoa land owners are small holders and there are only few large cocoa plantation owners. The cocoa cultivated land in the State is concentrated in Tawau District which is located in the East Coast of Sabah.

The bulk of the cocoa products in Tawau is exported as cocoa beans and some are processed into cocoa butter and cocoa powder before exporting. Most of these primary processed cocoa products produced in Sabah are sent to Peninsular Malaysia for further downstream processing into higher value added products such as chocolate and chocolate based products.

 

Cocoa : Commercial planting of cocoa in Sabah

 

Commercial planting of cocoa in Sabah began way back in 1954. The high prices of cocoa beans during the late 70's and early 80's, coupled with the availability of suitable lands in Sabah led to earnest planting in the state. Today Malaysia is the fourth largest producer cocoa in the world, with Sabah as its main producing state. In 1989 the Malaysian Cocoa Board was established with the overall responsibility for cocoa development, research and the coordination of all related activities. The Board’s headquarters is located in Sabah in recognition of the state being the main cocoa producer for the nation.

Although land area under cocoa cultivation in Sabah is declining, the state is still the nation’s largest producer of cocoa beans, accounting for 62.5% of the total land area cultivated and 64% of total cocoa bean production. Total land area in Sabah under cocoa cultivation in 2002 was estimated at 32,000 hectares, producing a yield of 30,422 tonnes of cocoa beans.

There is very little downstream cocoa processing activity in the state, thus presenting good opportunities for investment in this area. Only about 2% to 3% of the state’s cocoa bean production is currently being processed. Downstream activity is confined to only 2 companies; two, producing semi-processed products such as cocoa butter, cocoa paste, cocoa powder and cocoa liquor and finished cocoa-related products and the other, a small-scale company producing chocolates.

The State Government would continue to give emphasis on cocoa production to ensure adequate supply of cocoa beans for the processing industry. In the upstream sector, efficiency and productivity improvement is targeted upon. This would be achieved through consolidation of uneconomic-sized production units and the rehabilitation and upgrading of unproductive holdings with high yielding and disease resistant clones. Emphasis would also be given to research and development in breeding, cultural practices and processing methods to meet consumers’ desired cocoa bean quality and flavour. In the processing sector, the State Government encourages the manufacture of high value tertiary products. Efforts are also geared to diversify the industry’s product base through development of new products and finding new uses of cocoa.

Further development in the cultivation of cocoa in Sabah presents good investment opportunities due to the availability of suitable lands and the existence of established research and development. Further, the ready availability of dry cocoa beans in the state provides excellent opportunities for downstream processing. Investment possibilities utilising cocoa are found in the food processing industry such as the manufacture of beverages, confectioneries and biscuits, cocoa drink and confectionery and ice cream coatings. There is also scope for the manufacture of non-edible products such as cosmetics, toiletries and pharmaceutical items. Cocoa cultivation and downstream processing of cocoa are considered as promoted activities for Sabah and are therefore eligible for tax incentives
 

 March 24, 2011 10:18:58 PM

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