The Irony of a Cocoa Nation Importing Cocoa
The Irony of a Cocoa Nation Importing Cocoa
The irony of Indonesia’s cocoa industry lies in its dependence on imported cocoa beans despite being a producer. A striking example emerges from a Dubai Chocolate Macoa encountered at a small corner of RisetVaganza, the OJK Makassar office, in South Sulawesi. This product of Polewali Mandar presents a confident premium flavour, with a local touch, and has gone viral as a Umrah and Hajj souvenir, even reaching international markets.
Yet behind this impressive quality lies an irony that cannot be ignored: the country that produces cocoa beans still relies on imports to feed its own industry.
The contrast between the quality of local products and the dependence on raw materials exposes a deeper problem. The challenge facing Indonesia’s cocoa industry is not a lack of potential, but a structural problem that has never been comprehensively reformed.
Global Momentum Not Fully Captured
Globally, cocoa is in a strong expansion phase. The world’s import value jumped from around US$21.5 billion in 2020 to more than US$47 billion in 2024. Demand has surged, prices have risen, and producing countries are racing to secure positions in the global supply chain. Yet amid this momentum, Indonesia has not been able to respond optimally.
National production remains in the range of 600,000 to 700,000 tonnes per year, with productivity around 456 kilograms per hectare, far below the agronomic potential that could reach one to one-and-a-half tonnes per hectare.
With land area of about 1.3 million hectares, this productivity gap equates economically to a loss of potential production of around 700,000 tonnes per year. This is not merely a technical figure but an opportunity for foreign exchange, farmers’ income, and a strategic position in the global value chain that is being missed.
Downstream Moving, Upstream Lagging
On the downstream side, Indonesia has actually shown progress. Cocoa exports rose from around US$1.1 billion in 2021 to close to US$3.5 billion by 2025. The export structure has shifted from raw beans to intermediate products such as cocoa butter and cocoa powder, with cocoa butter being the main contributor. However, this progress hides a costly contradiction.
The processing industry is expanding, but not supported by adequate domestic raw material supply, making imports an unavoidable choice. Business-wise, this move can be understood as an effort to sustain production.
But nationally, it reflects a failure of coordination between upstream and downstream. When raw materials must be imported, the link between industry and domestic farmers weakens, and a portion of the added value that should be created domestically ends up abroad.
Half-Dinished Downstream and Value Leakage
The dominance of intermediate products in exports suggests Indonesia’s downstream localisation is still at the mid-stage. In the global value chain, the largest economic value lies in final products. Cocoa beans, priced around US$3,000 to US$4,000 per tonne, do gain value when processed into cocoa butter or powder.
But the significant value uplift occurs when cocoa is transformed into consumer chocolate products with strong brands and differentiation, where value per tonne can rise to US$10,000 to US$20,000, or more in premium segments.
Thus, much of the global cocoa industry’s added value still accrues to countries that control the final production and branding stage. If Indonesia could shift even a small portion of intermediate product exports into final products with higher value, the resulting foreign exchange could reach billions of dollars without expanding land. The potential exists but has yet to be optimised.
Industry Structure and Upstream Imbalance
The industry structure also reveals a significant imbalance. Large-scale cocoa processing capacity in Indonesia is largely controlled by multinational corporations. On the one hand, they bring efficiency, technology, and access to global markets. On the other hand, this dominance causes a portion of profits to flow back abroad.
Meanwhile, cocoa farmers, the backbone of the industry, remain in a weak position, facing limited land, tight access to financing, and insufficient incentives to raise production quality. Without serious upstream reform, downstream transformation will continue without a solid domestic foundation.
Global Standards Pressure and Market Risk
This situation becomes more complex with the emergence of new global standards such as the European Union Deforestation Regulation. This regulation demands supply chain transparency, land legality, and assurances of deforestation-free production.
For Indonesia, this is not merely an added challenge but a test of systemic readiness to manage the industry sustainably. Without such readiness, access to premium markets could become increasingly restricted.
From Local to Global: Prototypes Overlooked
Against these limitations, local initiatives like Macoa show a different path. With a bean-to-bar approach, products such as Dubai Chocolate not only process local cocoa but also master the processes, quality, and product narrative. The added value created is much higher than merely selling raw materials or intermediate products.
This approach demonstrates that excellence is not solely determined by production volume, but by the ability to manage the entire value chain. Unfortunately, models like this remain sporadic and have not become part of a national industry strategy.
Closing the Gap: From Volume to Value
Ultimately, the challenge of Indonesia’s cocoa industry is not the lack of resources but the direction of its management. For now,