Agronomist warns of cocoa glut

Agronomist warns of cocoa glut

JAKARTA (JP): An agronomist warned yesterday that further
expansion of Indonesia's cocoa plantations could lead to market
oversupply.

"Indonesia's current plantations are already adequate," said
Prof. Soleh Solahuddin of Halu Uleu University in Kendari,
Southeast Sulawesi, as quoted by Antara.

He said Indonesia's cocoa plantations currently total 374,000
hectares and produced 189,000 tons last year.

Since most of the production is exported and the world's
supply of two million tons already exceeds demand, expansion may
cause marketing problems, he said.

He added that the International Cocoa Organization's policies
of limiting supplies to the international market and reducing the
production targets of producing countries indicate a market glut.

Soleh said the complaint that Indonesian cocoa is inferior in
quality to that of other countries needs to be studied further.

"It might just be a move to push down Indonesia's cocoa
price," he added.

He admitted, however, that the government's efforts to produce
good quality cocoa need to be stepped up, given that the
fermentation process has not always been used in cocoa
harvesting.

"It is better for the government to concentrate its efforts on
improving product quality in order to make Indonesia's cocoa more
competitive on the global market, instead of encouraging further
plantation expansion," he said.

Soleh suggested that the government encourage the cocoa
processing industry to generate higher value-added returns for
the farmers.

"Exporting most of the cocoa in raw form is not beneficial, as
commodity prices tend to fluctuate markedly," he said.

According to the trade ministry, Indonesia exported 200,000
tons of cocoa beans and 31,260 tons of chocolate last year.

In a related development, Reuter reported from Malaysia that
plummeting prices, a debilitating disease and poor financial
support were spelling doom for that country's cocoa.

After roaring growth in the early 1980s, Malaysia's cocoa
production is estimated to plunge to an eight-year low this year.

An increasing number of growers say they are abandoning the
crop for oil-palm, the country's largest agricultural export.

The Malaysian Cocoa Board forecasts cocoa output will fall to
between 152,000 and 155,000 tonnes for calendar 1995, from
177,000 tonnes in 1994. (01)