ASEAN cocoa club talks about regional contract

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)

Output -- Page 12