Cocoa acreage in Vietnam could double
Vietnam may see its planting area for cocoa more than double over the next five years as some farmers switch from coffee and rubber to take advantage of rising prices amid forecasts of a global deficit.
Acreage will increase by 1,000 to 2,000 hectares (2,500 to 5,000 acres) per year to as much as 21,700 hectares by 2020 from 11,700 now, said Phan Huy Thong, head of the Vietnam Cocoa Committee, a state entity. The figure may reach 30,000 hectares if the government offers more encouraging policies, he said.
Futures gained 7% this year, on course for a fourth annual advance, amid speculation dry weather brought by the El Nino weather pattern will reduce harvests in West Africa. The global market is forecast to be in deficit of 125,000 tonnes in 2015-2016, said Euan Mann, director of Complete Commodity Solutions Ltd, two weeks ago.
“With climate and soil suitable for cocoa production, it’s a good time for Vietnam to take advantage of high prices,” said Mr Thong. “Cocoa prices are clearly in an upswing because of the deficit in the world market.”
The beans used to make chocolate are the best performer this year on the Standard & Poor’s GSCI index of 24 raw materials. World production may decline 4.9% to 4.16 million metric tonnes in 20142015 from a year earlier, the London-based International Cocoa Organization said in August in its quarterly report.
Some growers in the country, the top producer of robusta coffee beans, are considering replacing old and weak coffee and rubber trees with cocoa, he said. Some provinces are also leading projects to plant cocoa alongside cashews and other fruit. Robusta has fallen 19% in London this year, with rubber down 22% in Tokyo.
Vietnam’s current acreage for cocoa falls short of the government target of 35,000 hectares for this year, said Mr Thong. The area planted with coffee trees was 641,700 hectares last year, exceeding the country’s long-term plan, agriculture ministry data show.
In May, Cargill Inc halted its on-the-ground cocoa sourcing operations in Vietnam as acreage grew at a slower pace than its expectations amid tough competition with other crops, said Niels Boetje, managing director for cocoa and chocolate in Asia-Pacific. Vietnam accounts for less than 0.1% of world output, while West Africa represents more than 60% and Indonesia 11%, he said.