Indonesian Government Aims for Sweeter Deal From West Sulawesi’s Cocoa

20 Februar, 2011 | Source: Jakarta Globe

With ambitions of squeezing more money out of cocoa beans, Vice President Boediono on Friday said the government was planning to develop a value-added processing industry in West Sulawesi, the nation’s main growing region for the commodity.

“We should not stop at exporting raw cocoa beans only, as we will lose in the long run,” Vice President Boediono told farmers in Sondoang village, Mamuju district, West Sulawesi. “If we could have the processing industry in West Sulawesi, there will be more money for our nation that could later be returned to our people.”

West Sulawesi supplies 24 percent of national production, while Sulawesi Island as a whole accounts for around 72 percent.

The raw beans are acquired by foreign firms, which ship them abroad to make goods that are far more profitable than the raw materials. Most of Indonesia’s cocoa beans are purchased by international giants Cargill, ADM Cocoa, Armajaro and Ecom Cocoa, which enjoy cheaper prices compared to the global market.

“The National Cocoa Movement [Gernas] should not only focus on planting and increasing productivity but also create an established framework for lifting the economy,” Boediono said, referring to a policy designed to revive the sector. “Having a cocoa processing industry will be of additional value for us.”

Indonesia is the second-biggest producer of cocoa after Ivory Coast but has a chance to take the lead in exports as the African nation has suspended shipments due to political upheaval. “The Ivory Coast crisis gives Indonesia the potential to corner the market,” said Bayu Krisna Mukti, deputy minister of Agriculture.

The government introduced a 15 percent tax on cocoa exports last year to encourage companies to process the commodity on Indonesia’s shores. The policy has been roundly criticized by the Indonesian Cocoa Association (Askindo), which says it will cut into growers’ incomes. 

West Sulawesi plans to double cocoa production to 300,000 tons by 2013. Governor Anwar Adnan Saleh said 2010 output had increased significantly to 147,000 tons after the National Cocoa Movement was kicked off the year before. “After the national movement began, rehabilitation of cocoa planations has successfully solved problems with pests, low productivity and poor quality,” he said. “With increased production, we hope that by 2014, Indonesia will be the biggest cocoa producer in the world.”

Farmers from Mamuju, however, complained to Boediono about the low price of cocoa, which they said was caused by the long supply chain separating growers from exporters. “We want the government to shorten the market so farmers can sell directly to the industry,” a farmer told Boediono. Farm gate prices for cocoa beans are now Rp 26,000 to Rp 27,000 per kilogram (around $3).

 

 

President Joko Widodo (Jokowi) said Indonesia already enters years of low inflation, with inflation around 3 percent in the past two years.
President of the World Bank group, Jim Yong Kim, here on Tuesday expressed his support to the Indonesian governments plan on the tax reform program, which aimed to increase the state budgets income.
President Joko Widodo (Jokowi) plans to visit Turkey to develop partnership in strategic industry and economy with the country, Foreign minister Retno Marsudi said here on Monday at the state palace after a meeting prior to the presidents visit to Turkey and Germany.
Indonesian Foreign Minister Retno Marsudi and her Maldivian counterpart Mohamed Asim will hold a bilateral meeting in Jakarta on Wednesday (June 21) to discuss the cooperation in tourism sector.
The United Nations Food and Agriculture Organization (FAO) has praised Indonesia for its role in fighting illegal, unreported, unregulated (IUU) fishing, the Indonesian Embassy in Rome said.
Indonesias real GDP growth is projected to increase from 5.2 percent this year to 5.3 percent in 2018, according to the World Banks June 2017 Indonesia Economic Quarterly.
Address: 1068 Budapest, Városligeti fasor 26. | MAP |
Phone: (+36-1) 413 3800 Fax: (+36-1) 322 8669
E-mail: embassy@indonesianembassy.hu