Indonesia Hopes to Expand Its Cocoa Global Market

17, May 2015 | Author: Embassy of Indonesia

Source: Antara News

Jakarta (ANTARA News) – Indonesia, the worlds 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.

He stated that Indonesia has huge potential in cacao production as not many countries in the world have cacao plantations.

“Not many countries can produce cacao as only those with a tropical climate can produce it. As a result, we have a significant advantage,” he added.

In his tour of London to attend the conference, Kalla is accompanied by governors, whose provinces are among the cocoa-producing regions in Indonesia, including South Sulawesi.

The provinces of South Sulawesi, West Sulawesi, Southeast Sulawesi and Central Sulawesi contribute about 70 percent of the national cocoa production, which amounts to some 800 thousand tons a year.

According to Governor of South Sulawesi Syahrul Yasin Limpo, the cacao plantation in his province makes up about 75 percent of the nations cacao plantations. Indonesia has some 1.5 million hectares of cacao plantations, of which about 93 percent are owned by farmers.

“As Indonesia is a strategic region for the development of cacao plantations, we have potential to develop businesses in the field. In South Sulawesi alone, cacao plantations reach 75 percent, which is the highest in the country,” Governor Syahrul Yasin Limpo noted in London on Wednesday.

Furthermore, with the large number of chocolate consumers in Europe, Indonesia has a good market for the development of the cocoa industry.

“Through a national campaign, we have been able to produce some 800 thousand tons of the commodity a year,” he affirmed.

Moreover, West Sulawesi is also developing a cacao clone scheme. The cacao clone from West Sulawesi has attracted a Swiss investor into planning to process cacao beans from the province.

“The cacao clone from West Sulawesi is the best in quality in Indonesia,” Governor of West Sulawesi Anwar Adnan Saleh said last month, on April 25.

The Swiss investor is seeking a local partner, the governor said. He did not mention a name, but stated that the investor has the largest cocoa processing factory in Switzerland.

According to the governor, the Swiss investor chose to invest in West Sulawesi also because the province is the largest producer of cacao beans in the country. West Sulawesi contributes more than 50 percent to Sulawesis total production of cacao beans, and Sulawesi accounts for around 72 percent of the countrys total production of the food commodity.

In addition, cocoa produced in West Sulawesi province has been penetrating the Japanese market this year, according to the head of administration of Polewali Mandar district in West Sulawesi, Andi Ibrahim Masdar.

“We met with the government and some Japanese businesspersons recently. They asked us to export cocoa to their country,” Masdar added.

He further noted that the cocoa exported to Japan will be processed further into chocolate powder and products such as chocolate bars. However, cocoa farmers have yet to be able to export the requested amount of the commodity due to the high standards set by Japanese markets.

“The amount of cocoa exported to Japan is still limited because they set very high quality standards. Currently, we cannot meet their demand,” Masdar noted.

This week, Indonesia is targeting the European market, for which it is taking part in the FCC conference in London to promote the cocoa business in Indonesia.

As the worlds third-largest cacao producer, Indonesia has the potential to increase exports of the commodity to European markets.

However, Vice President Jusuf Kalla said in London on Thursday that Indonesia has faced difficulties in exporting the commodity to the region due to the imposition of a high import tax.

“The price of nearly all commodities declined recently except that of cacao. This indicates that there is potential for an increase in the demand for cacao and its processed products. We view this as a potential area as Indonesia is the worlds third-largest cacao producer,” he emphasized.

Therefore, Indonesia has urged the FCC to reduce tax on cacao imports from Indonesia to Europe.

“We are demanding equal treatment. There should be no discrimination against processed cacao products from Indonesia. Tax of about 5 to 6 percent is imposed on our cacao, but no tax is levied on cacao imported from Africa,” Kalla pointed out.

He added that Indonesia is the worlds third-largest producer of cacao beans after Ghana and Ivory Coast. The production gap between Indonesia and Ghana is only some 50 thousand tons a year.

“Our cacao bean production is recorded at 700 thousand tons a year, while Ghana, the second-largest producer in the world, produces 750 thousand tons. Our target is to increase the production by 50 percent (1,050 thousand tons) to meet the export demands in 2020,” the vice president explained.

He also expressed optimism that the welfare of cacao farmers in the country can be improved by increasing production.

“About 95 percent of the cacao production comes from farmers. This is a good thing as the distribution is good and the income goes directly to the farmers,” he observed.

Kalla also invited foreign investors to carry out cocoa businesses in Indonesia. “I am here to reinforce the commitment of the Indonesian government to become one of the most competitive countries for investors, particularly in the field of the cocoa industry,” Kalla remarked at a dinner with European entrepreneurs who are members of the FCC.

He pointed out that some cocoa bean processing companies, such as Nestle, Mars and Cargill, have developed their businesses in Indonesia.

The Indonesian vice president added that the presence of such large companies indicates that foreign businesses are interested in investing in the country, especially in the cocoa beans processing sector.

“With an investment value of more than 600 million U. S. dollars in plantations and crops, Indonesia continues to evolve into a choice for foreign investors,” Kalla affirmed.


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