INDONESIA HOPES TO EXPAND ITS COCOA GLOBAL MARKET

By Andi Abdussalam

Jakarta, May 16 (Antara) -- Indonesia, the world's third-largest cocoa producer, is intensifying its promotional activities to expand its cocoa exports to global markets, particularly in Europe.          As part of efforts to expand its cocoa global market, Indonesia is participating in a conference organized by the Federation of Cocoa Commerce (FCC) in London. It began on May 12 and will be held till May 17.          Vice President Jusuf Kalla is leading the Indonesian delegation, which includes the heads of coco-producing regions in Indonesia.          Among the heads of the Indonesian coco-producing provinces are Governor of South Sulawesi Syahrul Yasin Limpo, Governor of Southeast Sulawesi Nur Alam bin Isrudin, Governor of West Sulawesi Anwar Adnan Saleh, and Deputy Governor of West Sumatra Muslim Kasim.          The vice president said his mission at the conference was to increase the cocoa business in Indonesia so the commodity can expand its base in European markets.          "Cocoa is our third-largest export commodity after palm oil and rubber. The price of nearly all commodities dropped recently except that of cacao. This indicates that the global demand for cocoa is increasing," he affirmed.

NEXT GOVT CALLED ON TO DEVELOP NATION'S CACAO POTENTIAL

By Andi Abdussalam
    
    Jakarta, Sept 17 (Antara) - Cocoa stakeholders from regions that produce cocoa across Sulawesi Island had gathered in Makassar for a three-day meeting since last Sunday to observe the Indonesian Cocoa Day and discuss cocoa's quality improvement and development.
        Cocoa businesses, government officials, and farmers' representatives, who attended the meeting in South Sulawesi provincial capital Makassar, had come from cocoa-producing provinces of South Sulawesi, West Sulawesi, Southeast Sulawesi, and Central Sulawesi. These provinces contribute about 70 percent to the country's cocoa production of about 800 thousand tons per year.
         "The aim of the meeting is to seek a formula on how to increase the quality of our growers' cacao products," Director General of Quality and Standard Control of the Ministry of Agriculture Gardjita Budi stated in Makassar on Tuesday.
         Minister of Agriculture Suswono, meanwhile, stressed the importance of improving the quality of the country's cocoa, which is one of the nation's mainstay products. He supported the activities of the Cacao National Movement (Gernas), which aimed at helping improve cacao plantations and the quality of cocoa production.
        "Indonesia is the world's third largest cocoa producer and, therefore, this mainstay product needs special attention from the government. The next government has to support the Gernas," Suswono said in Makassar on Tuesday while speaking on the sidelines of the Cacao Day, which had been highlighted with celebrations since Sunday.

RI'S PROCESSED COCOA EXPORTS INCREASING

By Andi Abdussalam

Jakarta, May 31 (ANTARA) - Indonesia's overall cocoa exports are predicted to drop by about 12.5 percent this year, but its processed cocoa shipment to overseas markets has increased, which this year is expected to reach 40 percent of the total cocoa exports.          So far, most of Indonesia's cocoa products, or about 80 percent, are exported in the form of beans. However, the government has since April last year slapped a 15 percent tax on cocoa bean exports to encourage local factories to produce and increase exports of processed cocoa products.          Fermented cocoa beans producers said that Indonesia could increase the added value of its cocoa products by about Rp2000 (about US$0.23) per kg if exported in the form processed goods.          "It can be imagined if Indonesia's annual output reaches up to 500,000 tons. This means that there are about five hundred million kg of cocoa beans which lose Rp2000 per kg, or a total of about Rp1 trillion. This is farmers' money," Syamsuddin Said of the Indonesian Fermented Cocoa Beans Association, once said.          It is expected that this year cocoa exports from Indonesia, the world's third largest cocoa producer after the Ivory Coast and Ghana, will be between 280,000 ton and 300,000 tons, down from 320,000 tons in 2010, Zulhefi Sikumbang, chairman of an association known as Askindo, was quoted as saying recently by Reuters.          Askindo has predicted that the Indonesian production will be flat at about 600,000 tons this year, as increased output from new planting offsets the impact of heavy rains. Although its overall exports are declining over rise in domestic consumption, yet its processed ones on the rice.          This year, Indonesia's processed cocoa exports are expected to reach 40 percent of its overall types of cocoa exports. "Usually, Indonesia's processed cocoa exports only accounted for 20 percent of its overall cocoa exports. This year, its processed cocoa exports could reach 280,000 tons, or about 40 percent of its overall cocoa product exports," Piter Jasman, chairman of the Indonesian Cocoa Industry Association (AIKI) said  on Tuesday.           He said that processed cocoa exports had increased on the imposition of tax on cocoa bean exports so that raw material supply to local cocoa factories was ensured. "With guaranteed supply, we can produce more. After all, the government does withdraw any tax on processed cocoa exports," he said.          The values of Indonesia's cocoa exports in 2009 and 2010 were respectively recorded at US$1.41 billion and US$1.64 billion.          He said that with guaranteed cocoa beans supply at home cocoa factories were optimistic that they were able to increase production and raise processed cocoa contribution to the country's overall cocoa exports by 50 percent.          This is in line with the government's aim in imposing a 15 percent tax on cocoa bean exports, namely to bolster local processing industry and increase the added value of farmers cacao production.          About 93 percent of Indonesia's 1.5 million hectares of cocoa plantations are owned by smallholders.          "We are able to increase the contribution of processed cocoa products to the overall exports thanks to the export tax. This has guaranteed cocoa bean supply for local industries so they could increase their production. After all, processed cocoa exports are subjected to tax ," Piter Jasman said.          Data at the trade ministry showed an upward trend in the contribution of processed cocoa products to the overall national cocoa exports. Indonesia's cocoa paste and butter contribution to the overall cocoa exports increased from 17.71 percent in 2009 to 18.43 percent in 2010.          In this case, the values of Indonesia's overall cocoa exports in 2009 and 2010 were respectively recorded at US$1.41 billion and US$1.64 billion.          The contribution of cocoa paste and cocoa butter products to the overall cocoa exports in the January-February 2011 period reached 21.21 percent of the overall values of US$219.05 million.          In the same period in 2009, the contribution of cocoa paste and butter to the overall exports were only 15.56 percent of the overall export values of US$253.60 million.          The contribution of cocoa powder and cocoa bar exports also increased, which in 2009 was only recorded at 5.30 percent but in 2010 it rose to 9.08 percent.       In the January - February 2011 period the contribution of cocoa powder and cocoa bar exports to the overall cocoa exports was relatively high reaching 11.91 percent. In the same period in 2009, the exports of cocoa powder and cocoa bar products only accounted for 7.69 percent.          In the meantime, the contribution of Indonesia's cocoa beans and cocoa nut shell exports since 2010 has been showing a downward trend.          In 2010, the values of cocoa beans and cocoa nut shell exports were valued at US$1.19 billion, or 72.49 percent of the total export values which reached US$1.64 billion.          The contribution of cocoa beans and cocoa nut shell exports in that period was lower than their previous contribution which accounted for 76.98 percent of the total cocoa exports valued at US$1.41 billion in 2009.           The share of the cocoa beans and cocoa nut shell exports in the overall cocoa exports in the January - February 2011 period was recorded at 66.88 percent.          This figure was smaller if compared with the contribution of these two types of cocoa exports in the same period in 2009 which was 76.75 percent. ***5*** (T.A014/A/HAJM/20:55/a014) 31-05-2011 21:11:4

DOMESTIC CACAO INDUSTRY BEGINS TO THRIVE

By Andi Abdussalam

Jakarta, Oct 23 (ANTARA) - The government is optimistic that   tax imposed on cacao bean export will help develop the domestic cacao processing industry and give the commodity  added value  as   reflected in the industry's development in the past six monhs.          Earlier, Indonesia, the world's third largest cacao producer,  had exported about 80 percent of its beans. However, with the imposition of the export tax, exports could be cut for domestic grinders. The government hopes that in 2011 its exports of beans would drop from 80 percent to 50 percent.          According to Vice Minister of Trade Mahendra Siregar, national cacao processing industry has recovered with companies already producing to capacity.  "Right now it has fully recovered. Until the end of 2009 at least six companies have already produced 150,000 tons of processed cacao and this year the figure is expected to move up to 200,000 tons," he said.          The government has since April 1, 2010 imposed a 15 percent tax on cacao bean exports in order to boost local processing industry and increase the added value of farmers cacao production.  About  93 percent of Indonesia's 1.5 million hectares of cocoa plantations are owned by smallholders.          Since the imposition of the regulation last April,  several cacao processing companies have also planned to expand as of 2011 so that next year production of processed cacao is projected to rise to 300,000 tons or they would be able to process almost 50 percent of total national cacao bean production.          Not only expansion, there were even at least seven foreign investors who had expressed intention in developing cacao bean processing plants in Indonesia.           The seven foreign investors who  have expressed keen interest in building cocoa processing plants in Indonesia  are ADM Cocoa and Olam International of Singapore, Guanchong Cocoa of Malaysia, Cargill and Mars of the United States, Armajaro of Britan, and Ferrero of Italy, Director General of Agribusiness at the Industry Ministry Benny Wachjudi said.           Benny said Guanchong Cocoa was likely to build a cocoa processing plant with an annual capacity of 50 thousand tons early next year.          "I don't know when the investors will start investing. But they have asked for clarification on the possibility of the government reviewing the imposition of duties on cocoa exports," he said.           In addition, he said local cocoa producer PT Bumitangerang Mesindotama would also double the production capacity of its plant in Tangerang, Banten province, to 80 thousand tons per year.          The expansion project which would cost an estimated US$40 million would be completed in eight months' time, he said.           Benny said a number of downstream cocoa processing plants had begun to revive their activities after they ceased operation.           Chairman of the Indonesian Cocoa Producers Association (AIKI) Piter Jasman said the imposition of duties on cocoa exports had a positive impact on the growth of downstream industries. "Fifteen AIKI members have raised their production capacity. The national cocoa powder and butter production is projected to reach 300 thousand tons in 2011," he said.          Indonesia's grinders are now seen processing 150,000 tonnes of cocoa beans this year, up 15.4 percent from last year, but still below capacity of 345,000 tonnes per year.          According to Vice Minister Mahendra,  the development was a sign of growth and improvement in the added value of domestic cacao beans as earlier almost 80 percent of national cacao bean production was exported.            Mahendra said the recovery of the domestic cacao processing industry occurred following the implementation of cacao bean export tariff in April 2010.   The regulation has proven to be able to promote national cacao processing industry and attract foreign investment in the sector. "It has gone as expected before," he said.           Mahendra said according to the International Cocoa Organization (ICCO) Indonesia is the world's third biggest producer of cacao beans after Ivory Coast and Ghana.            The country's cacao bean production is recorded at 540,000 tons or 16.2 percent of the world's market while the Ivory Coast and Ghana respectively at 1.22 million tons and 680,000 tons.           According the trade ministry's data the value of cacao exports from January to July 2010 was recorded at US$977 million, up more than 40 percent compared to the same period of 2009 which was at US$670 million.           In the meantime, cacao bean exporters have asked the government to revise its cacao bean export tax regulation in order not to burden exporters and affect prices at the farmers' level.           "Their product could not yet be absorbed by local industry so that farmers' income was low," Chairman of the Indonesian Cacao Business Association (Askindo), Zulhefi Sikumbang said.  He said that in the last six months, the export tax was seemed to be borne by exporters while in fact it was borne by farmers.          Therefore, he called for revision of the government's regulation on cacao beans export tax. Under decree No. 67/2010, dated April 1, the Finance Minister imposes a 0-15 percent tax on cacao beans based on the reference price in US currency. Tax is imposed on cacao bean exports with reference price beginning US$2000 per ton.           Zulhefi said that export tax should be fixed based on the rupiah currency, not on the US currency, so that the rate would be in a fixed rate without any change in the rupiah rate against the US dollar changed.          "The cacao export tax rate should be fixed at Rp1,000 per kg," he said adding that export tax should be imposed only if the cacao beans price exceeded US$2,700 per ton at the commodity prices in New York.***2*** (T.A014/A/HAJM/22:49/H-YH) 23-10-2010 22:48

RI TO BOOST FERMENTED COCOA BEAN PRODUCTION

By Andi Abdussalam

Jakarta, April 29 (ANTARA) - Indonesia, the world's third biggest cacao producer, has decided to begin giving the commodity  added value by  marketing or exporting it in fermented form starting this year.  The policy was expected to prevent a potential loss of about Rp1 trillion per annum.          "We have already begun producing fermented cocoa beans. Our target for this year is still small, namely between 5,000 and 10,000 tons. But we are resolved to increase the volume to between 100,000 and 150,000 tons a year in the long run," Syamsuddin Said of the Indonesian Fermented Cocoa Beans Association said.          The determination to earn more from cocoa exports motivated  Syamsuddin Said and Peter Jasman, chairman of the Indonesian Cocoa Industry Association (AIKI), to meet Industry Minister MS Hidayat recently to discuss their idea in more concrete terms.          So far, most of the cacao Indonesia produces is not marketed or exported in  fermented form so that earnings from the commodity are not as high as they can actually  be. The price difference between non-fermented and  fermented cacao beans is about Rp2000-Rp2500 per kg. Indonesia's annual cacao production is between 400,000 and 500,000 tons.          "It can be imagined that Indonesia's annual output can reach up to 500,000 tons. This means that there are about five hundred million kg of cocoa beans which lose Rp2000 per kg, or a total of about Rp1 trillion. This is farmers' money," said Syamsuddin who claimed that his association groups cacao farmers and cocoa collectors.          Therefore, the efforts to produce fermented cocoa bean output are a must. After all, Indonesia's cocoa industry faces stiffer competition following the implementation of the China-ASEAN free trade agreement (CAFTA) earlier this year.          This will also cause non-fermented cocoa beans at home to be uncompetitive because of the lower cost of imported cocoa powder.          As part of the free trade agreement, Indonesia must scrap its 5 percent import duty on cocoa powder, which would encourage imports from rival grinders Malaysia and Singapore at the expense of domestic grinders.          Malaysia and Singapore also benefit from zero tax on imported fermented cocoa beans, which are used to improve the flavor of cocoa powder, whereas Indonesia imposes a 5 percent duty on such imported beans from West Africa.          Indonesia imports about 8,000 tons of cocoa powder a year from Malaysia and Singapore, or a fifth of the amount needed by the domestic food industry.          Jasman said domestic grinders, which supply about 40,000 tons of cocoa powder to local food producers, import about 30,000 tons of fermented cocoa beans from West Africa.          "We must increase (output of) fermented beans. At the moment, more than 90 percent of Indonesian beans are not fermented," Jasman told Reuters recently.          Therefore, Syamsuddin hailed the Indonesian government policy to impose a 15 percent export tax on cocoa exports beginning this month. He hopes that the export tax funds would in the end return to cacao growers for development so that they can increase their productivity and improve the quality of Indonesia's cocoa output.          "With the use of the funds to boost productivity and to improve quality we can be a leading cocoa producer in the world in the coming two or three years with quality equal to that of Ghana. So far the quality of our cocoa product is inferior," Syamsuddin said.          However, the aim of the export tax has not yet been well popularized so that some farmers consider it disadvantageous for them. "With the policy, cocoa will be exported in the form of powder products or fermented cocoa ones, not in the form of raw cocoa beans," Agriculture Minister Suswono said.          He said that the value of fermented cocoa was higher and it would attract foreign investors to build their factories at home. The problem is that farmers are not informed of cocoa prices in the market, and in this case traders capitalized on it, Suswono said.          In a meeting last week with growers in South Sulawesi, one of the country's major cacao producers, the minister received complaints from local farmers. The minister promised to evaluate a finance ministerial decree which imposed a 15 percent tax on cocoa exports.         "Basically, this policy will fully be supported if it has the aim of improving farmers' income and competitiveness but we will evaluate it if it proves to disadvantage them," the minister said.          The finance minister has issued Decree No. 67 / 2010 on Cocoa Export Tax which reaches 15 percent effective April 1, 2010. Based on this decree, cocoa exports are subject to progressive taxes beginning from zero percent to 15 percent based on cocoa price developments in the world market.          In this case, Syamsuddin and Peter Jasman asked the government to take a firm stand not to change its cocoa export tax policy. So far, Indonesia's cocoa has been given a low grade by traders in the world market because it is not fermented and has no international reference prices in New York and London.          "Because it is not fermented, the price cut of Indonesia's cocoa product can reach up to US$350 per ton from the reference prices in New York and London," Jasman said adding that at present fermented cocoa sold at US$2.900 per ton in the world market.          He said that demand for this commodity in the world market continued to increase by about five percent per annum, where today demand reached 3.5 million tons.          Thus, with the imposition of the export tax, there would be many foreign and domestic investors who would make investment and build cocoa processing industries in the country's cocoa production centers.          Jasman said that Indonesia has a big potential for cocoa processing industries. Of the 40 processing factories with a production capacity of 300,000 tons, only five were still in production this year because they were not able to compete in the world market.          "I am convinced that with the imposition of the progressive export taxes, there will be many more investors who want to build factories in the country in the near future," Jasman said.      (T.A014/A/HAJM/13:35/A/O001) 29-04-2010 13:42:0