ASEAN cocoa club talks about regional contract

JAKARTA (JP): Southeast Asian cocoa producers opened a two-day meeting yesterday to discuss the possibility of establishing a common regional trading contract as an alternative to the existing contracts of London, New York and Paris.

The proposed contract, which Malaysia initiated to bridge the quality gap among the region's cocoa producers and narrow cocoa products' price disparities, would be used in the seven ASEAN countries.

The draft contract covers business legal documents, national standards for cocoa beans, including weights, lot size, delivery, quality testing and storage facilities .

"We want to provide a contract for the cocoa industry in the region (Asia and Oceania) to do transactions without having to use foreign contracts," P.S. Siswoputranto, the executive director of Indonesian Cocoa Association, said during a break at the meeting.

ASEAN groups Brunei, Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam.

Siswoputranto said the proposed contract was aimed at guaranteeing a continual cocoa supply to the international market and at raising production levels in the region to 500,000 tons a year by 2000 from 464,900 tons last year.

"Many have assumed that the quality of cocoa production in Southeast Asia is inferior to that in Africa, but really we have superior cocoa products," he said.

He said the cocoa beans produced in East Java not only had a good aroma and taste but could also be used to make different colored cocoa products.

By guaranteeing a standard cocoa bean quality more customers would buy from the region, he said.

"The question now is whether the proposed contract can gain the confidence of the world's business." he said.

But Siswoputranto said the proposed contract would probably not be realized soon.

"We are still exploring all possibilities," he said.

Siswoputranto said there were still many other aspects of the draft contract which needed to be studied. They include an arbitration mechanism for dispute settlement and contract management matters.

Besides the proposed contract, the meeting which ends today will discuss cooperation in upstream and downstream activities and regional cooperation in cocoa pest and disease control.

Indonesia and Malaysia are the region's top two cocoa producers. Last year, Indonesia produced 295,000 tons of cocoa beans and Malaysia 120,000.

Regional cocoa bean production including that of Papua New Guinea was 464,900 tons last year. This was about 17 percent of the world's 2.73 million tons. (02)

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