Dropping cocoa bean export '2011'

JAKARTA: Indonesian cocoa bean exports in 2011 are seen dropping as much as 20 percent to about 345,000 tonnes because of increasing domestic consumption as firms invest in local grinding, the country's industry minister said on Friday.

The government slapped an export tax on cocoa beans for the first time last year in an effort to encourage local refining, as it seeks to spur value-added industries rather than simply being an exporter of base commodities.

"Our estimation is for cocoa bean exports in 2011 to drop 20 percent, mainly because cocoa bean domestic consumption is increasing in line with our growing cocoa grinding capacity," Mohammad Hidayat told Reuters on the sidelines of an industry event.

Hidayat said exports last year from the world's third largest cocoa producer were 432,000 tonnes.

This differs from the Indonesian Cocoa Association's estimate of 320,000 tonnes of exports last year, though the association also sees exports falling this year to between 280,000 tonnes and 300,000 tonnes.

Government and industry figures often differ on production and exports from the sprawling archipelago, though the trend of declining exports this year because of rising domestic use is clear.

Local grinding did not pick up much in 2010, but has done so this year after a surge in commodity prices. US cocoa futures hit a 32-year peak in early March because of a conflict in Ivory Coast, the world's top producer.

Indonesia's cocoa industry is looking to grab a bigger slice of the US market after the unrest in Ivory Coast, but it needs more investment to boost quality and output.

Hidayat said he had inaugurated 14 cocoa grinders in Indonesia with total annual grinding capacity of 430,000 tonnes, including a new investor from Malaysia as well as from five local firms who have restarted grinding after a halt of several years.

Piter Jasman, chairman of another industry association, the Indonesian Cocoa Industry Association (AIKI), saw 2011 cocoa bean exports at between 300,000 tonnes to 350,000 tonnes.

"By my calculation, domestic cocoa consumption in 2011 will be at 280,000 tonnes. So with such consumption, cocoa bean exports may reach 300,000 tonnes to 350,000 tonnes," Piter told Reuters on Friday.

He estimated cocoa bean production in 2011 at 600,000 tonnes, in line with previous estimates.

COPYRIGHT REUTERS, 2011