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.
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