Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	PUTRA WORLD TRADE CENTRE, 
			KUALA LUMPUR 
Tarikh/Date 	: 	19/10/94 
Tajuk/Title  	: 	THE OPENING OF THE MALAYSIAN 
			INTERNATIONAL COCOA FAIR 1994 


 
   Firstly, may I welcome  all the foreign  delegates  with
a  'Selamat  Datang'.    I  wish  to  thank  the  organising
committee  for  giving me this opportunity to address you in
conjunction with the Malaysian International Cocoa Fair 1994
(MICF '94).
2.   For the  next  few  days,  I believe ,  you will think,
hear,  see and speak of cocoa,  the delectable food that was
the gastronomic delight  of  the  rich  and  the  famous  of
yesteryears.  While you are here I  would  also  suggest you
find the  time to  visit  the  many  historical  places  and
partake in the many activities organised in conjunction with
Visit Malaysia Year 1994.
3.   The Malaysian  International  Cocoa  Fair  is the first
such fair to be held in Malaysia and the first of  its  kind
in South-East Asia.   The theme of this Fair, 'Prospects for
Cocoa Production and Manufacturing in the 21st Century',  is
most appropriate  and  timely.   If the cocoa industry is to
face  the challenges of the 21st century,  steps  should  be
taken now to  chart  the way forward.  At the same time, the
fair will introduce Malaysia as a regional centre for cocoa-
based activities,  especially in the processing and  trading
of beans and cocoa derivatives.
4.    Malaysia   at  the   moment  is   the   fifth  largest
producer of cocoa in the world.   In  1993  it  had  350,000
hectares  under  cocoa  cultivation  producing  some 200,000
tonnes  of  cocoa  beans.    Malaysia  has  eleven  grinding
factories with a total capacity of 100,000 tonnes per annum,
thus   processing   at  least  50  percent  of  total  beans
production.   This is in line with the increasing  trend  of
producing more value added products  from  Malaysian primary
commodities.   Over  the  last  two  decades  the  value  of
downstream  processed and  semi-processed  products  of  all
primary commodities produced in this country increased  from
RM446.7 million in 1974 to  RM19.5 billion  in  1993.  I  am
confident primary commodities  will  continue  to contribute
significantly   to  the  industrialisation  process  of  the
country.
5.   Malaysia  attaches  considerable  importance  to  cocoa
despite  the fact that it contributes less than one  percent
of  total  export  earnings.    This  is  evidenced  by  our
membership  in  the  Cocoa   Producers   Alliance  and   the
International Cocoa  Organisation.  In  Malaysia cocoa  is a
source of  livelihood,  either  directly  or  indirectly  to
about  one  percent  of  our  population.   It  is  also  an
inter-crop for many farmers.  The  organisation of this fair
reiterates our continuing  interest in  cocoa  as  a  viable
commodity with potentials which can be further exploited.
6.     Today and in the decades to come, information will be
an invaluable resource.  In addition to  land,  capital  and
human  resources,  information  will be the driving force to
spearhead the  advancement  of  the  cocoa  industry in  the
future.   Indeed,  it is  the  current  understanding  among
management  gurus  and  futurists that the driving force  of
future economic growth and industrial transformation will be
anchored on information and the capacity and skill to manage
it.  Such is the power of information technology that it has
been able  to  help  in  levelling  the  playing  field  for
competition between big and small businesses.
7.     The interlocking relationship between information as
an enabling resource and cocoa as a traded commodity in  the
international  market  is apparent.   One of the reasons for
the market or policy failures is  the  lack  of  information
which  results  in  underpricing,  over  production  of  the
commodity and also the lack of technology transfer.  Insofar
as information on cocoa is concerned I understand  that  for
the  last   three   years  cocoa  consumption  has  exceeded
production   and   therefore   producers   should   increase
production to take advantage of the expected price increase.
However, since 1989 an overhanging stock, perceived to be in
the  region of 1.1 to 1.4 million tonnes of beans,  which is
equivalent to about five to seven months of consumption, has
cast depressing shadow over cocoa  prices.  But  has  anyone
really challenged  the accuracy or even the existence of the
`statistical stock'?   The so-called overhanging  stock  has
been  bugging the cocoa market for the last five years or so
thus depressing any appreciable price increase.   I  believe
the  situation  could be different if information technology
can make available instantaneous information on  production,
daily  sales,  cost structures, warehouse capacities and the
like.
8.   Cocoa is being produced in the tropical  belts    where
the  developing  nations  of the world are located.  None of
the countries of the North produce cocoa,  yet  the  biggest
markets for cocoa and its derivatives  are  found  in  these
developed nations.   Indeed  a few mega confectioneries that
produce chocolates and  beverages  have  carved  out  market
shares  exclusively  for themselves so much so the producers
of cocoa find it  very  difficult,  if  not  impossible,  to
penetrate these products  markets.  In order to  seal  their
fate even  further,  technologies associated with downstream
manufacturing have been zealously guarded.   The inequitable
relationship  between  the producer countries of  the  South
and the consumer countries of the  North is  made  worse  as
developing countries produce more but  have  to  sell  their
beans or powder to  the  same  handful  of  giant  chocolate
manufacturers of the North.   Naturally the North is able to
manipulate prices in its favour.  It is not wrong  therefore
to interpret this as another example of the rich living  off
the poor.   For instance,  while  the  market value of cocoa
from  the five main cocoa producers  of  the  world,  namely
Cote d'Ivoire,  Brazil,  Ghana,  Malaysia  and  Indonesia in
1989/90  amounted  to US$2 billion,  the commercial value of
chocolate products  produced by  the  world's  five  leading
confectionery manufacturers was US$36  billion.   The  issue
here is what can or should be done to  ensure  an  equitable
distribution of the benefits contributed in no small measure
by the sweat and toil of the cocoa growers.
9.    In  this  respect  I strongly urge that all tariff and
non-tariff  barriers be taken  down  so  that  international
trade can be promoted freely in the true spirit of GATT.  At
the same time I would also like to  suggest  that  each  and
every   cocoa  producing  nation  embark  on  a  coordinated
campaign to promote and educate the consuming public  on the
wholesomeness of cocoa, not only as a food product, but also
as  a  commodity that contributes to the economic well-being
of many developing nations.   Also, in the  true  spirit  of
North-South   cooperation   information   on   cocoa  trade,
production,  consumption,  stock,  technologies,  should  be
managed and  disseminated  widely  and  efficiently  by  the
International Cocoa Organisation.  Through such  measures  I
am confident  that  the  production  and  consumption  plans
envisaged in the  Fifth International Cocoa  Agreement  will
bear fruit enabling the world cocoa economy  to  see  better
days sooner.
10.  In holding this Fair and related  activities,  Malaysia
seeks  to  share  with all of you the vision to develop this
part   of  the  world  as  a  sphere  for  cocoa  activities
especially for processing and  manufacturing  of  chocolates
and derivatives as well as trading.   We have  very  liberal
investment policies with  good  infrastructures  and  a very
trainable labour  force,  and  more  importantly,  political
stability.   The  growing  economies  of  this  region  will
continue to provide opportunities and challenges even to the
cocoa industry.  The entrepreneurs among you  perhaps  could
take advantage of the fact that the per  capita  consumption
of chocolate in this part of the world is miniscule compared
to that of the matured markets of Europe and North  America.
The potential is therefore greater.
11.    In  terms  of  statistics, Switzerland is the world's
leading consumer  with  a  per  capita  consumption  of  4.8
kilograms while in the largest market, the  U.S.A,  the  per
capita consumption is only 2.1 kilograms.  By comparison the
figure for Malaysia is 0.7 kilograms and that  of  China  is
only 0.02 kilograms.    What is  more  important is the fact
that the  Pacific Rim will be the next centre of growth  and
Malaysia could  well be the gateway to this dynamic  region.
With the recent successful conclusion of the GATT talks  and
the renewed surge of the free market system in many parts of
the  world,  international trade will be the  driving  force
that will propel future economic growth.
12.  For its part Malaysia will continue to give emphasis to
cocoa.   Research and development will be undertaken both in
cultivation and manufacturing research so that the  industry
will  be able to customise products for the particular needs
of the different markets and  to  be  environment  friendly.
The  need  for  R & D  in  the   cocoa  industry  cannot  be
over emphasised.  At  the  moment  only  cocoa  beans  which
constitute about 12 percent of the cocoa fruit is being made
use of while the rest is discarded.   Malaysia's  experience
in the oil palm industry shows that the entire  fruit,  even
tree trunk and leaves  are  of  economic  value.  Similarly,
more can be done for cocoa.
13.  Malaysia will not be weary or be afraid to venture into
untamed   territories   or   markets.     More  importantly,
Malaysians are culturally attuned to listening to your ideas
and proposals on how we can together transform  this  region
into  varied  industrial centres for our mutual benefit.  We
are prepared to forge strategic alliances and  relationships
to  make  the  cutting-edge even sharper.   Partnership with
Malaysia   is   a  proposition   that  should  be  seriously
considered, especially in a globalised economy.
14.   On that note, I take great pleasure in declaring  open
the Malaysian International Cocoa Fair 1994.