Vietnam farmers plant more cocoa, see good demand

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Rising cocoa demand has encouraged farmers in Vietnam to increase planting of trees and seek certification of bean quality from an early stage, they said on Tuesday.

While Vietnam is the world's biggest producer of robusta coffee, its output of cocoa still is only around 2,000 tons a year from 18,000 hectares, of which 2,500 hectares are productive at the moment, Agriculture Ministry data show.

But the government plans to boost annual output to 108,000 tons from 60,000 hectares by 2015, a local newspaper said in June, citing the Agriculture Ministry.

Farmers say they are responding to favorable market conditions, including high prices and strong demand, as well as changing policy by state agricultural companies.

"Cocoa will surely grow because of good demand, and farmers want to do it as it would bring more income," said Phan Van Thuan, a 47-year-old production manager looking after 70 hectares of cocoa planted by 80 families in Krong Pak district, 30 km east of Buon Ma Thuot city.

Buon Ma Thuot is the capital of Daklak province, which already produces a third of Vietnam's coffee.

In the first half of 2010, cocoa grindings rebounded as chocolate manufacturers replenished stocks following a slump in demand in 2009. Dealers said that world demand in 2011 was expected to rise slightly.

Cocoa prices in Daklak rose to VND48.5 million per ton on Tuesday from VND48 million a week ago. Domestic prices have now jumped 59 percent from VND30.5 million on Nov. 17, 2008 before a rally last year.

Farmers in the Central Highlands coffee belt said they had started harvesting cocoa for the second time this year and that output was expected to rise, given the strength of young trees.

"The soil here is very good for cocoa and buying demand is good now," Thuan said.

A former coffee farmer, Thuan switched to managing cocoa fields owned by October Coffee Company in 2004. Cocoa trees become productive after three years, and they are harvested twice a year -- in April-May and November-December.

Certified cocoa

Seven Vietnamese companies, October Coffee among them, have been restructuring production management to cope with a code introduced by Dutch organizations Solidaridad and UTZ Certified to certify production is clean and sustainable.

The two organizations have been working to improve Vietnam's coffee production since 2006 but only started the process for cocoa early this year, said Le Hong Van, Vietnam office and project manager for Solidaridad and UTZ Certified.

"Unlike coffee, we want to work with cocoa properly at the very start, and so far it's been going well," Van said in Buon Ma Thuot city, the capital of Daklak.

The seven companies hope to secure a UTZ certificate for a combined output of 890 tons by 2011, she said.

Agribusiness giant Cargill Inc, which has been helping farmers grow cocoa in southern provinces, has promised to pay October Coffee Co $100 over the domestic spot price for each tonne of cocoa, said Tran Ngoc Phuoc, vice director of the coffee firm.

"Cargil has guaranteed to buy all of our products, and several other buyers also approached seeking information about cocoa," Phuoc said.

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