Malaysia cocoa processing at 10-year low on scarce bean supply
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LONDON, Jan 13 — Malaysia processed the least cocoa in a decade after the supply of beans from Indonesia fell on export taxes and new factories.
Cocoa ground into butter and powder dropped 14 per cent to 244,423 metric tons in 2014, the Malaysian Cocoa Board said in an e-mailed statement today. Processing in the country has declined 19 per cent in the past four years, while Indonesia has seen growth of more than 60 percent, according to estimates by KnowledgeCharts, a unit of Commodities Risk Analysis in Bethlehem, Pennsylvania.
Malaysian grindings have dropped after an export tax on Indonesian beans provided an incentive to process cocoa locally and Olam International Ltd and Cargill Inc have set up new plants. The additional capacity in Indonesia is using up most of the domestic output, prompting Malaysian factories look for other supplies, such as West Africa, for beans.
“The country’s primary source of supply are Indonesian beans which have become scarcer and more expensive,” Laurent Pipitone, director of the economics and statistics division at the ICCO, said by phone. Slowing demand for cocoa products has also hurt processing, Pipitone said.
A major producer until the early 1990s, Malaysia harvested only about 4,000 tons last season, according to a November estimate from the International Cocoa Organisation. Indonesian output amounted to 405,000 tons, while Ivory Coast, the top grower, produced about 1.74 million tons.
Malaysian processing fell 21 per cent in the fourth quarter. European grinding figures for the fourth quarter will be released on Jan. 15 at 7 a.m. London time. — Bloomberg