Spotlight on cocoa Asia

China – the next cocoa superpower?

By Anthony Myers

- Last updated on GMT

China's first crop of cocoa pods. Pic: Chinese Academy of Tropical Agricultural Sciences
China's first crop of cocoa pods. Pic: Chinese Academy of Tropical Agricultural Sciences

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News that China's small batch of cocoa beans has been recognised by the Bioversity International’s 2021 Cocoa of Excellence competition is seen as another indicator of the rise of Asia’s cocoa sector.

According to the Chinese Academy of Tropical Agricultural Sciences (CATAS), the 5kg consignment valued at approximately $3,600, was shipped to Europe in October 2020 after the country produced its first batch of cocoa beans in Xinglong.

The town is located on the South China island province of Hainan within the ‘cocoa belt’ that is defined as the narrow band 20-degrees on either side of the equator. It is the country's only tropical rainforest and the most northern location of cocoa cultivation globally.

China cocoa

China reportedly cultivated its first and new cocoa variety known as Reyin 4, which has been patented. Other cocoa varieties with code names, such as ZYP6-8 and Xiangke 1, have been developed and evaluated by international organisations and found to be of ‘high quality with unique flavour’.

A spokesperson for CATAS said: "Cocoa is a raw material for making chocolate. With the increasing demand for chocolates, Hainan has been expanding its cocoa planting area and making breakthroughs in technological development​."

At present, China’s cocoa-growing region is relatively small as the tropical rainforest covers a land mass of approximately 35,354km2​. In comparison, Cote d’Ivoire and Ghana's tropical rainforests cover an estimated 212,000km2​ and 91700km2​, respectively.

Niche product

While China’s geographical limitations may mean the scale of its cocoa output translates as a niche product, the development is causing concern with some of the large-scale producer nations, not least because of the resolve of the Chinese authorities in applying technology to increase its cocoa output.

Fiifi Boafo, Public Affairs Manager for Ghana’s COCOBOD, told Citi Business News: “It’s a concern in the sense that generally the cocoa market has been saturated and consumption does not seem to be growing as fast as production of cocoa so any new addition in terms of production is a matter of concern because higher production without commensurate consumption will force the price of cocoa downwards.”

Cocoa prices are already forecast to drop 4.3% in 2021 to average $2,286/ton, as global demand struggles to return after the COVID-19 pandemic and changes in consumer health priorities during the lockdown.

The quality of China’s cocoa could also be an issue – and if the Chinese crop is of superior quality, it could find itself at a competitive advantage and disrupt the premium market share of other players.

Cocoa of Excellence

China’s cocoa beans have been selected among the 50 best entries in Bioversity International’s 2021 Cocoa of Excellence competitions and will compete for honours in this year’s International Cocoa Awards at the Salon du Chocolat later this month in Paris, France.

By participating in the Cocoa of Excellence programme, China is asserting itself as a bonafide member of the league of cocoa-producing countries.

Where Asia has another advantage over West Africa is that the bulk of the global $150bn cocoa market revenue (80%) is generated at the secondary processing stage of turning the beans into chocolate and is dominated by Europe - and also Asia.

The Chinese could enter this  market and compete, if not corner the market, given their reputation for research and development, and the quick deployment of technology to lower production costs.

Along with China, Taiwan and Australia have also started growing cocoa. In Taiwan, cocoa is grown in Pingtung, its southernmost city and were areca nuts were previously grown. Since the early 2000s, Taiwanese farmers have replaced areca nuts with cocoa and now produce approximately 4,000 tons of cocoa pods, or 250 tons of dry beans, doubling its output in just under 10 years

In Australia, cocoa production is concentrated in Queensland along the wet tropical coast from the Daintree region to south of Tully.

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