The Growing Demand For Chocolates; Producers In A Fix To Meet The Market Needs
The largest producers of the cocoa bean, Malaysia and Indonesia are forced to import more from South America and Africa to meet the growing demand for chocolates in the Asian countries. Peter Jasman, the chairman of Indonesia’s Cocoa Industry Association, mentions that top producers, like Indonesia, has imported 240,000 metric tons of beans in the year 2018 and is expected to go higher this year. Meanwhile, the yield has reduced in Indonesia due to several reasons like farmers opting for crops that yield better profit than cocoa, ageing trees, and different crop diseases. As the demand for processing increased, Indonesia is forced to export from countries like Africa and South America and rather than becoming major exporters they are forced to import the bean and transformed into bean importers.
Indonesia is doing its best to transform the industry to meet the export demand and local demand and has taken various steps to increase bean productions. A national program has been planned to increase the production of beans crop by the year 2024 to 600,000 tons.
The cocoa board data indicates that Malaysia had increased imports up to 10%, i.e., 345,000 tons in the year 2018. The same story prevails in Malaysia as the farmers have improved profits from palm oil, most of them have shifted from cocoa yield to palm oil. The production has decreased from 100,000 tons to 1000 tons. This has forced the producers to seek for cocoa beans from other countries, including Asia’s largest producers Guan Chong Bhd. They are also planning to move their plants closer to South America and African farmers.
The cocoa powder is an important product that is used in many products like ice cream, cookies, and many different chocolate-based products and drinks. The demand for cocoa powder is drastically increasing in Asia. To meet the Asian demand for cocoa, many Global companies are investing in Indonesia, and Olam International Ltd is one of them. They spend around $90 million in the year 2019 to purchase BT Cocoa. The Cocoa Association of Asia mentions that the processing of beans has increased since the last four years in Asia by more than 25, i.e. 780,000 tons in the year 2018.
The increased demand for chocolate-based products, drinks, and bakery items among the Asian people has increased, and the Asian market for chocolate is increasing by a compound annual rate of 5% for five years, as mentioned by Anthony Chine, the research analyst at Euromonitor International.