Export Tax Down, Export Up

In May – June 2011, the government reduces export tax for cacao to 10% after it once decided to impose 15% export tax on cacao. High export tax had a consequence on the performance of cacao export in April 2011 which was sluggish. Based on data of the National Bureau of Statistics (BPS) in April 2011 volume of Indonesia’s cacao export only reaches 1,199 tons. This number falls by 83.6% from the month before which reaches 18,743 tons. Export tax reduction is expected to boost cacao export.

The Indonesia cacao farmers Association (APKAI) predicted that in 2011 national production of cacao beans could reach more than 700,000 tons. While, in fact, the Indonesian cacao Association (ASKINDO) is pessimistic that cacao beans production this year could only reach 500,000 tons. APKAI’s prediction is higher than ASKINDO’s as there are some regions which produce higher volume of cacao, they are, amongst other, central sulawesi and west sulawesi. In these regions, cacao bean harvest could reach 500 tons/hectare. Nationally, cacao beans harvest in January – May 2011 only reaches 300,000 – 400,000 tons.

The international Cacao Organization (ICCO), stated that world’s cacao supply will experience a 189,000 MT surplus. The oversupply is due to increase of cacao production in Africa. Cacao harvest I Ghana, world’s second largest cacao producer, will increase 52% to 960,000 tons in the harvest season this year. Meanwhile, cacao production in Ivory Coast will also increase 4.7% to 1.3 million tons. Cacao production in Nigeria will increase by 5000 tons to 240,000 tons. Cacao harvest in Cameroon is predicted to increase  100,000 tons to 215,000 tons.

On the contrary, according to ICCO, Indonesia’s cacao production will record the highest decline. Cacao harvest in Indonesia, as world’s third largest cacao producer, is predicted to decline to 510,000 tons from 550,000 tons.

Two factors that cause increase of cacao harvest are: firstly, improvement of climate condition. Secondly, high cacao price which encourages farmers to grow more cacao. Price of cacao once touched its highest level in the past 32 years, latest on March 4, 2011, at USD 3,775/ton.

Meanwhile, the Indonesia Cacao Industry Association (AIKI) predicted that number of fake cacao powder circulating in Indonesia reaches 5000 tons a year. This condition causes losses to industry as price of fake cacao powder is 50% cheaper than the original one. Fake cacao powder is processed cacao shell. Unsterile cacao is frequently spoiled, and the processing of cacao beans uses fumigation which involves the use of chemicals. WHO has declared that fake cacao powder is unfit for consumption.

Currently, total national production of cacao processing industry reaches 280,000 tons/year. From this amount, domestic consumption only reaches 40,000 tons, and the remaining is for export. Domestic consumption of cacao powder is low or only 0.06 kg/capita. This rate is much lower than in Europe which reaches 10 kg/capita.