Farmers, industry sign MOU on cocoa<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
The Association of Cacao Farmers and the Association of
\nIndonesian Cacao Industry (AIKI) signed a memorandum of
\nunderstanding (MOU) on Wednesday in a bid to boost national
\nproduction, which currently is only running about half of its
\ntotal capacity.<\/p>\n
AIKI chairman Piter Jasman said the cocoa products processors
\nexpected the government-facilitated MOU to eventually help local
\ncacao processing factories to run at full capacity within two
\nyears.<\/p>\n
The MOU obliges the factories to buy 15 tons of unfermented
\ncacao beans at Rp 12,200 (US$1.29) per kilogram and 15 tons of
\nfermented beans at Rp 13,600 per kg as an initial step.<\/p>\n
The Rp 1,400 margin is expected to serve as an incentive to
\nencourage farmers to process their commodities before selling
\nthem.<\/p>\n
Local cacao factories have been processing just half of their
\n310,000-ton total capacity due to a scarcity of fermented cacao
\nbeans in the country, Piter said.<\/p>\n
Factories need fermented cacao beans to produce better quality
\ncocoa powder, liquor and cocoa butter, but farmers tend to sell
\nunfermented beans to exporters as they need to sell them fast and
\napparently do not have good networks with local manufacturers, he
\nexplained.<\/p>\n
Domestic farmers only ferment about 10 percent total cacao
\nbeans, thus allowing exporters to buy from farmers at lower
\nprices.<\/p>\n
Chairman of the cacao farmers association Central Sulawesi
\nchapter Ahwan Ahmad said in reality, exporters could buy for as
\nlow as Rp 9,000 per kilogram instead of the global market price
\nof about Rp 12,000.<\/p>\n
\"Exporters and traders don't care whether the bean has been
\nfermented or not, they just mix them and buy them at a lower
\nprice. While the farmers have less bargaining power, as they want
\nto sell fast,\" he said.<\/p>\n
Ahwan added that farmers could get better prices if they had
\ntheir cacao beans fermented.<\/p>\n
The MOU sets out Rp 13,600\/kg as the starting price, he said,
\nadding that the fermented beans price could reach at least Rp
\n15,000 per kg.<\/p>\n
To process fermented cacao beans, farmers only need five days.
\nBut Ahwan said the farmers needed the government's help to
\npromote effective methods and benefits of fermenting the beans.<\/p>\n
According to the Association of Indonesian Cacao Exporters
\n(Askindo), the country's farmers produced an estimated 400,000
\ntons of cacao beans last year, but exported up to 277,000 tons,
\nmostly to Malaysia.<\/p>\n
Ministry of Industry's director for agro-based businesses,
\nYamin Rachman said the MOU was expected to push farmers to double
\nthe total amount of fermented cacao beans this year.<\/p>\n
He said the government was working to permanently remove a 10
\npercent value added tax (VAT) imposed on processed cacao beans to
\nfurther encourage farmers to ferment.<\/p>\n
The MOU was also signed by other associations, including the
\nAssociation of Indonesian Cacao Farmers (APKAI) and the
\nAssociation of Indonesian Cacao and Chocolate Industry Players
\n(APIKCI).<\/p>\n
Indonesia is the third largest cacao exporter after the Ivory
\nCoast and Ghana as a result of its 900,000 hectares of cacao
\nplantation areas. Its cocoa accounts for 11 percent of global
\ndemand which stands at three million tons per year.<\/p>\n
In 2002, Indonesia's cocoa output reached its peak production
\nof 433,411 tons.<\/p>\n
But the country still imports fermented cacao beans, mostly
\nfrom Ghana, and a significant amount of Malaysian cocoa products,
\nwhich, ironically, were made from Indonesia-grown beans.<\/p>\n
Indonesia was Malaysia's largest importer of cocoa powder
\n(containing added sugar or other sweeteners) last year,
\naccounting for almost 60 percent of the neighboring country's
\ntotal export of the commodity.<\/p>\n
Indonesia was also the second largest importer of Malaysian
\nchocolate.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/farmers-industry-sign-mou-on-cocoa-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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