Indonesia's Sustainable Cocoa is Not Only for EU
Indonesia’s Sustainable Cocoa is Not Only for EU
Jakarta. Indonesian businesses believe that the homegrown cacao and processed cocoa that meet sustainability standards are not solely meant for the European market.
The European Union (EU) will soon only accept imported cocoa that is proven to not come from deforested land. The policy better known as the EU Deforestation Regulation (EUDR) will apply for large operators by end of year, and will gradually reach to other business sizes The Indonesian Cacao Association-Cocoa Sustainability Partnership (CSP) highlighted the need to ensure local farmers meet the sustainability standards, including by certification programs.
“But we shall do this not only to enter the EU market. But it’s also about penetrating the rest of the world. All countries will eventually implement these sustainability standards,” Askindo-CSP chair Jeffrey Haribowo told a conference not long ago.
“Sustainability means there is no child labor, planting in forest areas, forced labor, and the use of banned pesticides,” Jeffrey said.
Askindo-CSP estimates revealed that around 90% of Indonesian cacao went to export markets. Jeffrey went on to say that these massive shipments meant that Indonesia must prioritize cocoa and chocolate products when negotiating tariff-slashing trade pacts with other economies.
“Trade agreements create a level playing field for Indonesia and other cocoa-producing countries. For instance, they have to compete on the same import duties,” Jeffrey said.
The EU doesn’t produce cocoa, hence the Indonesian import.
However, Indonesian cocoa is subject to an import tariff of 6-8%, while other suppliers are subject to a 0% rate.
Jakarta will soon have a free trade agreement with the EU, which will cut tariffs on cocoa down to 0% within five years. The highly anticipated trade agreement is slated for entry into force in early 2027. Senior economic minister Airlangga Hartarto had described the deal as a “game-changer” for Indonesia’s EU-bound exports and investment inflows. The agreement will also open doors for EU-bound Indonesian palm oil.
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