Drought, violence threaten RI's cocoa output

Drought, violence threaten RI's cocoa output

SINGAPORE (Reuters): Indonesia's cocoa output may fall this
year to less than 340,000 tons, possibly as low as 300,000,
because of drought, violence in growing regions, pests and rising
fertilizer prices, traders said on Wednesday.

Indonesia, the world's third largest producer of cocoa after
Ivory Coast and Ghana, produced 362,000 tons last year.

Dry spells in the key growing area of Sulawesi were damaging
flowers ahead of the mid crop in September/October, traders said.

Months of fighting between Muslims and Christians in Poso
district, which accounts for 40 percent of cocoa output in
central Sulawesi, have also disrupted plantation work.

"According to my estimates, Indonesia can only produce 300,000
tons of beans," said one trader in Makassar, capital of South
Sulawesi.

The absence of rains in Sulawesi for nearly two months and a
shorter main crop could hit this year's production. There is also
talk that the El Nino weather phenomenon, which causes drought,
has returned to the region.

"We have expected El Nino to return this year. We may see a
severe drought in August through November," said the Makassar-
based trader.

The main crop, which starts in March/April in Sulawesi,
normally ends in September, but traders said the harvest was
already at its tail-end due to poor maintenance and pod borers.

"I haven't seen rain in the past 50 days. We still have some
beans from the main crop, but daily arrivals have fallen to 200
tons from 300 tons last week because the main crop has almost
ended," another trader in Makassar said. "I am sure production
will be less than 340,000 tons this year because pod borer is
rampant. Prices of fertilizer are high, which discourages people
from taking care of their crop."

Due to the volatile rupiah, prices of urea fertilizer in
crisis-hit Indonesia hovered around 55,500 rupiah ($4.92) per 50
kg this month, versus around 53,000 rupiah last month. There is
talk that prices of fertilizer could rise by 30 percent soon.

Sulawesi traders said differentials widened to $120 a ton on
Wednesday from $105 for September beans because of losses in New
York on Tuesday, when active September ended down $9 at $898 a
ton.

In Malaysia's growing area of Sabah, some growers said they
were cautious about prospects for this year's main crop, which
started in October.

"The weather is okay but we don't understand why there are
only a few flowers on the trees," said one trader in Tawau, a key
growing area in Sabah on Borneo.

The official Malaysian Cocoa Board expects output to rise to
up to 80,000 tons this year from 70,262 in 2000 because of higher
yields. Traders expected output to hit only 60,000 tons.