Indonesia gears up to meet rising cocoa demand

By Karen Willmer

- Last updated on GMT

Related tags: Cocoa, Ghana, Côte d'ivoire, Cocoa bean, International cocoa organisation

Indonesia is expecting an increase in the country's cocoa
production, despite recent poor crops, according to local news
media.

The increase in supplies could help meet the world's rising demand for cocoa, and ease the pricing pressure on processors. In its latest report on the market the International Cocoa Organisation forecast that the global cocoa deficit would be 145,000 tonnes in the current growing season, compared with the 192,000 tonne surplus in the 2005-2006 season. Antara News said Indonesia was currently the world's third largest cocoa producer, after the Ivory Coast and Ghana, but had the potential to become the world's second largest cocoa producer by 2012. Halim Abdul Razak, chairman of the Indonesian Cocoa Association (Askindo), told Antara News last week that the country's production reached 590,000 tonnes a year, compared to Ivory Coast's 1.3m tonnes, and Ghana's 650,000 tonnes. He expected its cocoa production to reach one million tonnes by 2012, with 2006 world cocoa production reaching 3.3m tonnes. "The world's increasing demand for cocoa at present serves a good condition for increasing the country's cocoa productivity,"​ Razak said. This comes as Ghana announced it wants to boost its output to 1m tonnes by 2010, according to a report last week by Reuters . According to Reuters, Ghana's industry regulator Cocobod has subsidised fertiliser for sale to growers to help improve production. Both countries have announced that production will be lower this year because of a lack of rainfall. With this downfall in production, prices have generally been higher as people have rushed to buy the crop. However, Ghana anticipates a strong start to the 2007/2008 crop due to later rain, according to Reuters. Last month, the International Cocoa Organisation forecasted the global cocoa deficit to be 145,000 tonnes, compared with the 192,000 tonne surplus in 2005-2006. The ICCO expected global production to fall, while demand for dark chocolate in Asia was growing along with increasing sales in Western Europe and the US. "It should be noted that the cocoa markets tend to be very volatile at the beginning of the summer period and this year is not expected to be an exception,"​ reported the ICCO May report. "The market shows that demand is relatively strong and market participants are willing to pay a premium to obtain cocoa sooner rather than later."​ There were fears in Europe earlier this week over the supply of cocoa beans from Nigeria, after cargo ports in the country closed due to a four-day strike over the price of fuel. Nigeria is the world's fourth largest cocoa grower.

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