Indonesia's cocoa bean exports from its main growing island of Sulawesi slumped in March due to a combination of wet weather conditions and cocoa farmers switching to more profitable crops. Sulawesi cocoa exports fell 69 percent to 3,505.66 tonnes in March from 11,132.01 tonnes a year ago and were down 56 percent from the previous month, Indonesia Cocoa Association data showed on Monday.
February exports were at 7,917.7 tonnes. "For the past few months, generally the outlook for production is not that great," said Lynette Tan, an analyst with Phillip Futures in Singapore. "This is due to weather concerns and also the margins that the farmers are earning from cocoa." She said many cocoa growers were switching to coffee, which is less labour intensive.
Indonesia, which lags Ivory Coast and Ghana in production, is battling disease and adverse weather conditions that have hampered cocoa supplies for years. Heavy rains in the first quarter are set to slash output in the world's third-largest producer of cocoa beans, according to the industry, but a recovery later in the year should lift output 10 percent to about 475,000 tonnes.
Government tax incentives, including export tariffs and investment tax holidays, have boosted domestic cocoa grinding demand, and are also seen cutting bean exports from Southeast Asia's largest economy. Last year, a poor crop after an abnormally wet rainy season and an outbreak of a deadly fungal disease ahead of the main harvest in April curbed shipments. Smallholders own more than 90 percent of the total plantation area, and the rest is held by state-owned and private plantation firms.
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