AN OVERVIEW OF THE COCOA SECTOR IN VIETNAM FOREST SCIENCE SUB-INSTITUTE OF VIET NAM - WWF VIETNAM FOREST SCIENCE SUB-INSTITUTE OF VIET NAM - WWF VIETNAM.

AN OVERVIEW OF THE COCOA AN OVERVIEW OF THE COCOA SECTOR IN VIETNAMSECTOR IN VIETNAM

FOREST SCIENCE SUB-INSTITUTE OF VIET NAM - WWF VIETNAMFOREST SCIENCE SUB-INSTITUTE OF VIET NAM - WWF VIETNAM

This project is This project is supportedsupported

by by

The Dutch Directorate The Dutch Directorate –General for –General for Development Development

Cooperation (DGIS), Cooperation (DGIS),

WWF and the WWF and the International Food International Food and Agricultural and Agricultural

Trade Policy Council Trade Policy Council (IPC(IPC))

Market TrendsMarket Trends

During 1990s, world cocoa During 1990s, world cocoa production increased 1 to 2 % per production increased 1 to 2 % per year (3.16 m.t. in 2004/5) year (3.16 m.t. in 2004/5)

Reduction of volume in several big Reduction of volume in several big producers: Cote d’Ivoire, Ghana producers: Cote d’Ivoire, Ghana Malaysia and Indonesia.Malaysia and Indonesia.

Several of the world largest cocoa Several of the world largest cocoa importers are heavily dependent on importers are heavily dependent on cocoa products from West-Africa and cocoa products from West-Africa and IndonesiaIndonesia

Looking for new marketsLooking for new markets

Increase of consumption at double Increase of consumption at double the production rate the production rate

Demands for cocoa increasing 2-4% Demands for cocoa increasing 2-4% p.a, especially in Asia and pacific p.a, especially in Asia and pacific regions (China’s 5%) regions (China’s 5%)

Largest processing and grinding Largest processing and grinding countries: Netherlands, the US, countries: Netherlands, the US, Germany, Brazil and the UKGermany, Brazil and the UK

Conditions for CocoaConditions for Cocoa

Temperature 18-210C (min), 30-320C (max.)

Annual rainfall 1,500-2,000mm

Humidity 100% (night time);70-80% (daytime).

Water logging Sensitive

Dry season Not exceed 3 months with less than 100mm rainfall.

pH 5.0-7.5

•Cocoa grows well from 20Cocoa grows well from 20ooN to N to 2020ooS.The natural habitat of the cocoa S.The natural habitat of the cocoa tree is evergreen rainforeststree is evergreen rainforests

Many hectares of land around Many hectares of land around Mekong Delta and Central Mekong Delta and Central highlands satisfy these highlands satisfy these requirementsrequirements

Current Cocoa Planting Areas Current Cocoa Planting Areas in Vietnamin Vietnam

Provinces Areas (ha)

Ben Tre 1,500.0

Ba Ria-Vung Tau 450.0

Dac Lak 1,083.5

Binh Phuoc 268.0

Tien Giang 300.0

Dong Nai 50.0

Binh Dinh 100.0

Lam Dong 1.0

By 2010 produce 20,000ha in four By 2010 produce 20,000ha in four regions which cover 28 provinces regions which cover 28 provinces (currently 4,000ha)(currently 4,000ha)

-Ben Tre has planned to invest a budget of -Ben Tre has planned to invest a budget of VND 24 billion to grow cocoa on 10,000 ha. VND 24 billion to grow cocoa on 10,000 ha.

-The Dak Lak coffee company has switched -The Dak Lak coffee company has switched 500 ha of coffee to cocoa.500 ha of coffee to cocoa.

Cocoa crop development will not Cocoa crop development will not repeat the mistakes with coffee repeat the mistakes with coffee (high quality cocoa)(high quality cocoa)

Government Plans for Cocoa Government Plans for Cocoa ProductionProduction

Progress in Cocoa Production Progress in Cocoa Production in Vietnamin Vietnam

0

1 0 0 0

2 0 0 0

3 0 0 0

4 0 0 0

5 0 0 0

6 0 0 0

7 0 0 0

8 0 0 0

9 0 0 0

1 0 0 0 0

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5(p r o j)

2 0 0 6(p r o j)

There is a potential for becoming a There is a potential for becoming a well-known exporter for high quality well-known exporter for high quality cocoa beanscocoa beans

Smallholder production offers more Smallholder production offers more potential than extensive or potential than extensive or monoculture plantationsmonoculture plantations

Many international groups involvedMany international groups involved Donors (e.g. DGIS, GTZ, USAid, USDA)Donors (e.g. DGIS, GTZ, USAid, USDA) Companies (e.g. Cargill, Masterfoods, ED&F Companies (e.g. Cargill, Masterfoods, ED&F

Man) Man)

Cocoa coordination committee Cocoa coordination committee established (16 members)established (16 members)

An Initial Assessment of Cocoa An Initial Assessment of Cocoa

in Five Provincesin Five Provinces

Survey method: “Rapid Rural Survey method: “Rapid Rural Appraisal (RRA)”Appraisal (RRA)”

Locations: Binh Phuoc, Dak Lak, Locations: Binh Phuoc, Dak Lak, Dong Nai, Binh Dinh and Lam DongDong Nai, Binh Dinh and Lam Dong

Research raises a number of issues:Research raises a number of issues:

Firstly,Firstly, the slow progress on the the slow progress on the development of certified cocoa development of certified cocoa varieties in Vietnam. varieties in Vietnam.

SecondlySecondly, limitation in knowledge , limitation in knowledge and experience on cocoa crops by and experience on cocoa crops by both farmers and extension workersboth farmers and extension workers

ThirdlyThirdly, occurrence of diseases and , occurrence of diseases and insect pests insect pests

Fourthly,Fourthly, require a viable market so require a viable market so that farmers can sell their productsthat farmers can sell their products

Fifthly,Fifthly, improved planning for the improved planning for the development of the cocoa sector, development of the cocoa sector, both nationally and provinciallyboth nationally and provincially

RecommendationsRecommendations

Promote the early completion of a set of Promote the early completion of a set of certified cocoa varieties and quality certified cocoa varieties and quality standards for cocoa beans in Vietnamstandards for cocoa beans in Vietnam

Establish more nurseries to provide high-Establish more nurseries to provide high-quality seedlings to growersquality seedlings to growers

Extensions workers and cocoa farmers Extensions workers and cocoa farmers provided with high quality training provided with high quality training programs on cultivation practices, post-programs on cultivation practices, post-harvest treatment, crop maintenance harvest treatment, crop maintenance and insect pest control measures and insect pest control measures

Establish a viable market system to provide Establish a viable market system to provide farmers with greater security that they can farmers with greater security that they can sell their producesell their produce

Systematic research on the environmental Systematic research on the environmental impacts of different production techniques impacts of different production techniques and species mixes, as well as biological and species mixes, as well as biological mechanisms to control pests and disease mechanisms to control pests and disease outbreakoutbreak

Greater government support for the Greater government support for the establishment of post-harvesting facilities in establishment of post-harvesting facilities in VietnamVietnam

Develop more coordinated and clear Develop more coordinated and clear government planning on cocoa government planning on cocoa production (central and provincial levels)production (central and provincial levels)

Assess impacts of tariff escalation on the Assess impacts of tariff escalation on the value-added cocoa industry in Vietnamvalue-added cocoa industry in Vietnam

Involvement of multi stakeholders in the Involvement of multi stakeholders in the development of the cocoa sector in development of the cocoa sector in Vietnam (Gov, Donors, NGO). Co-Vietnam (Gov, Donors, NGO). Co-ordinating Committee for Cocoa ordinating Committee for Cocoa DevelopmentDevelopment

Next stepsNext steps

Phase II will build on recommendations Phase II will build on recommendations from phase Ifrom phase I

Work closely with Cocoa Coordinating Work closely with Cocoa Coordinating CommitteeCommittee

To receive this document please contact: To receive this document please contact: Pham Minh Thao at WWF Vietnam Pham Minh Thao at WWF Vietnam ([email protected])([email protected])