The International Cocoa Organization (ICCO) says Vietnam appears to be the new frontier of cocoa cultivation and is a promising region for production expansion given inadequate global supplies.

On November 30, the ICCO in a statement estimated the world production of cocoa to have hit 4.031 million metric tons for the 2015-2106 season, which is some 150,000 metric tons short of satisfying global demand.

With ordinary cocoa commanding a sales price ranging US$2,800-US$3,300 per metric ton over the past year and higher flavoured cocoa’s selling for as much as US$5,000 per metric ton— the market is ripe for Vietnam to expand production says the ICCO. Speaking earlier this year at an industry forum in Ho Chi Minh City, Laurent Pipitone, director of the economics and statistics division of the ICCO, told the audience demand for dark chocolate and fine flavour cocoa has been dramatically rising around the globe, especially in the EU and US.




The direction for Vietnam segment, he recommended, is to focus on getting a toehold in the quality premium chocolate market. To accomplish this, he said, the segment would need to reorganize and develop the capacity to efficiently produce and process large volumes of quality cocoa on a consistent basis, year in and year out.

Naturally, that would require significant investment to fund the cost of restructuring the segment, Mr Pipitone added. The segment currently has an estimated 11,200 hectares under cultivation, with productivity remaining far too low at an average of 0.85 metric tons of dry beans per hectare. This defect largely arises because of plant over density, improper shade management, and ineffective application of fertilizers and insecticides— all of which are problems that can readily be corrected.

The Vietnam government has undertaken a number of initiatives to improve infrastructure, expand training and strengthen linkages among smallholder farmers and other actors in the supply chain of the segment. With nearly 50,000 hectares of coconut and fruit trees in the Mekong Delta, and about 100,000 hectares of cashew nut trees in the southeast and Highlands regions, there is huge potential to expand cocoa cultivation and cutback production of less profitable produce, said Mr Pipitone.

Statistics of the ICCO show that two-thirds of all world production is in Africa, 17% in Asian countries and 14% comes from South America. Cocoa is mainly processed into cocoa butter, powder, paste/liquor and chocolate confectioneries. Cocoa butter is also used in the manufacture of tobacco, soap and cosmetics, but mainly for confectionery products. Out of a total of 4,395,657 metric tons of cocoa produced in 2011, the latest year for which comprehensive worldwide estimates have been prepared, Vietnam produced 6,000 metric tons of cocoa from 11,000 hectares of production.

The Southeast Asian country ranked as the 11th largest producer in the globe of cocoa behind the Dominican Republic in 10th place, which produced 54,279 metric tons. Brazil was the largest producer at 1,350,320 metric tons accounting for slightly over half (54%) of global market share. Indonesia, Ghana and Nigeria trailed Brazil in descending order of magnitude with production and global market shares of 712,200 (42%), 700,000 (42%), and 400,000 (32%), respectively. Europe remains the largest processor of cocoa by some margin, says the ICCO, but the most dynamic region is Asia, now recording an average annual growth rate of 7%, and the time is right for Vietnam to reach out and take a bigger bite of the market.

Read more at: http://english.vietnamnet.vn/fms/business/169308/vietnam-hungry-for-bigger-bite-of-cocoa-market.html

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