Indonesian cocoa output seen down about 25 percent

Cocoa output in Indonesia, the world's third-largest producer, is seen down about 25 percent this year due to wet weather and disease and will improve in 2012 to a level below initial estimates, the Indonesian Cocoa Association (Askindo) said on Friday.
Indonesia has been grappling with pests and diseases for years. Heavy rains in the main growing island of Sulawesi have again triggered the spread of Vascular-streak Dieback (VSD), a disease that attacks branches, leaves and trunk, eventually killing the trees.
Cocoa bean output is forecast at 450,000 tonnes in 2011, Askindo Chairman Zulhefi Sikumbang told a news conference. In August, Askindo had pegged production at 400,000 tonnes. Indonesian output was about 600,000 tonnes last year.
Better weather conditions are expected to lift production to 500,000 tonnes next year, Sikumbang said, but still below Askindo's July estimate at 600,000 tonnes. Indonesia, which accounts for about 10 percent of global cocoa output, is seen exporting 200,000-210,000 tonnes in 2011, he added. The Southeast Asian producer launched a $350 million programme in 2009 to boost cocoa output to more than 600,000 tonnes in four to five years. Exports were 320,000 tonnes in 2010. But it has yet to show results, with adverse weather, growers' failure to follow advice on planting techniques and mismanagement working against the campaign.
Askindo also proposed an export tax of 30-35 percent on cocoa cake, due to the fact that all of Indonesia's cocoa cake production is exported to other countries. Cocoa cake is used for cocoa powder production. Indonesia, Asia's second-largest grinder after Malaysia, currently has a 10 percent export tax for cocoa beans, which is aimed at boosting its domestic grinding industry.
Askindo's chairman added that Indonesia may need to import about 100,000 tonnes of cocoa beans in the next two to three years, as new grinding facilities push capacity to more than 600,000 tonnes. "Indonesia will have to import cocoa bean from other countries such as Ivory Coast, Ghana and Papua New Guinea," said Sikumbang. Indonesian cocoa grinders will process 400,000 tonnes of beans in 2012, exceeding the current capacity as the country expands its grinding sector, the Indonesian Cocoa Industry Association (AIKI) said.