Perspective for cocoa cultivation in Malaysia: re-look at the economic indicators

The various economic and related factors, which include cocoa prices, cocoa pod borer, labor, productivity, farm economics and competitiveness, were reviewed to come out with the economic indicators for assessment of the perspective for cocoa cultivation in Malaysia. The analysis shows that despite of relatively low prices of cocoa recorded in certain period in the past, the average price in the past 30 years was US$1,806/t or RM4,712/t, which is considered high and very attractive for investment. The large variation observed in the prices of cocoa provides the opportunity for profit taking in investment. With appropriate application of available technology, cocoa pod borer can be effectively managed with little crop loss through sound management. With a good understanding of the crop requirement and appropriate application of available technology, the labor requirement in cocoa cultivation can be minimized and efficiently managed. There is clear indication of excellent potential for improvement in productivity from the Malaysian national average of about 0.9 t/ha to 2 t/ha or higher through appropriate utilization of planting technology and sound management with commitment and care as the key success factors in cocoa cultivation. At a productivity of 1.5 t/ha or higher, there is always profit in return on investment. The annual rate of return on investment (RROI) can be very attractive at a rate of up to several hundred percent or higher depending on the levels of productivity and prices. It was indicated that a family of smallholders can look after up to 8 ha of cocoa farm without the need of employing hired labor. Reasonable to high level of income for a family can be derived from cocoa cultivation with a farm size of between 6 and 8 ha at a productivity of 1.5 t/ha or higher. The cocoa planting industry in Malaysia has the competitive edge in many aspects and will have to be driven by technology and management push for high productivity and efficiency to ensure the competitive edge. On the basis of the above analyses, it is concluded that cocoa cultivation is very much an economically viable investment in contributing to the national economic development in Malaysia.