In a converted farm building in the Mae On valley, 40 minutes east of Chiang Mai Old City, a single-origin cacao bean is fermented, roasted and pressed into a finished bar without leaving the property. The output at the Skugga Estate chocolate lab is counted in kilograms, not tonnes, and each bar sells for several times the price of supermarket chocolate. This small, deliberate corner of the trade is the part that Thailand’s own trade strategists now describe as the country’s clearest route into a growing global market.
The national numbers were set out this week by Nantapong Chiralerspong, director-general of the Commerce Ministry’s Trade Policy and Strategy Office (TPSO). Thailand produced more than 3,100 tonnes of raw cocoa beans in 2025, nearly 40 per cent more than the year before. Exports of raw beans and processed cocoa and chocolate products reached more than US$131 million last year, up 27.4 per cent, with a further US$32.5 million in the first quarter of 2026. The TPSO sets this against a global market it expects to grow from US$55.8 billion in 2025 to more than US$86.5 billion by 2034, an average annual rate of 4.98 per cent, citing research firm Fortune Business Insights.
The headline figure matters less than where the value sits. The TPSO is explicit that the opportunity for Thai exporters lies in high-value, environmentally sound and health-focused products, including those carrying geographical indication status. That is a description of premium, traceable, single-origin chocolate. It is not a description of bulk commodity volume, and the distinction decides who in Thailand benefits.
The volume is southern. The value proposition is northern.
Most of Thailand’s raw cocoa comes from the south, concentrated in Songkhla, Nakhon Si Thammarat, Phatthalung, Prachuap Khiri Khan and Ranong. Chiang Mai will not out-produce those provinces on tonnage, and competing on volume against established southern farms is not the local opportunity. The northern advantage is a different one. It is flavour, provenance and the craft economy that has grown up around both.
Cacao in the northern highlands grows at the outer edge of where the crop survives, above 18 degrees latitude, in cooler valleys with distinct seasons. Most of it grows in agroforestry plots alongside mango, banana and coffee rather than in cleared monoculture. Specialist makers describe the resulting beans as unusually complex, with tropical-fruit and spice notes that do not resemble West African or South American cacao. That difference is the entire commercial argument for a premium product.
The groundwork for this is local and decades old. At Maejo University, Professor Sanh La-ongsri and the Thailand Cocoa Center developed the I.M.1 varietal, a cross adapted to northern highland conditions and now grown on dozens of farms across the region. The varietal gave Chiang Mai growers a starting point that southern bulk production never required, and it underpins the city’s standing as a credible fine-flavour origin.
Skugga as a working model
The Mae On lab is a useful case because it is built around exactly the segment the TPSO identifies. Skugga works with single-origin Thai cacao sourced directly from domestic farms and controls fermentation, roasting and production on site, which means every bar is traceable to the place it came from. The valley sits at 410 metres in the northern highland corridor, the same terroir that international tasters have begun to associate with distinctive Thai flavour. The economics follow the model rather than the volume. A bean-to-bar operation that owns its supply chain and sells on origin earns a margin that a commodity supplier never reaches, and it does so from a footprint that suits a Chiang Mai farm rather than a southern plantation.
Skugga is one operator in a wider field. Chiang Mai craft makers including Siamaya turn local cacao into bars sold to residents, tourists and overseas buyers, cafes across the city build menus around single-origin Thai chocolate, and farms in districts such as Mae On and Mae Wang fold cacao into existing planting and open their gates to visitors.
Quality is the foundation under the price
The premium pricing rests on proven quality, and Thai craft chocolate has earned it at the highest level. Bangkok micro-batch maker PARADAi has won gold at the International Chocolate Awards World Final using Thai-origin beans, and a growing field of producers now holds international recognition, with the London-based Academy of Chocolate awarding silver to Thai-origin dark chocolate at its 2025 awards. That record is the reference point a Chiang Mai maker or exporter cites when justifying a price that sits well above the commodity rate.
Geographical indication as a regional tool
The TPSO’s emphasis on geographical indication is worth reading as a direct instruction to producing regions. GI status ties a product’s identity to a defined place and protects it in export markets. Doi Tung coffee already demonstrates how a northern GI origin commands a premium that ordinary commodity grading does not. A registered Chiang Mai or northern Thai cacao origin would give local growers and makers the same instrument, and it arrives at a useful moment. European import rules now require full traceability from farm to importer, and the smallholder agroforestry model common in the north carries that traceability by default.
The constraint is supply, and it is a business problem
The barrier is not demand. Bordin Charoenpongchai, president of the Thai Trade Association of Cocoa and Chocolate (TACCO), points to the appeal of locally crafted chocolate made with ingredients such as rice milk and Thai herbs, and the TPSO names China, Japan, the United States, Europe and ASEAN neighbours as the markets in reach. Japan and China alone recorded Thai cocoa and chocolate export growth above 40 per cent in a single year.
The difficulty is producing enough fine-flavour cacao to meet that interest. Cacao trees take three to four years to reach first harvest, competing crops offer faster returns, and the northern sector was fragmented for decades before bodies such as TACCO existed to coordinate it. Makers willing to pay two to three times the commodity price to local farmers have found that the premium alone does not generate volume fast enough to scale. For Chiang Mai, that gap is the opening. Highland valley microclimates suit fine-flavour cacao, the agroforestry model is already embedded in how northern farmers work the land, and the makers who can prove origin are the ones holding the pricing power.
The export numbers confirm the trend has started. The volume question is now a local one, and the businesses that answer it first, on Chiang Mai’s terms of quality and provenance, are the ones that will hold the position.
