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21 April 2025 (closed)
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Latest Reports Cocoa Production
On Thursday 04 April 2024 Indonesia Investments released the March edition of its monthly report. The report focuses on a number of key economic, political and social developments that were felt by Indonesia in the month of March 2024.
The price of cocoa is expected to remain bearish on the short-term as supplies are set to rise in the western part of Africa, particularly Ivory Coast and Ghana. At the end of trading on Wednesday (03/05) the cocoa price had slid 1.16 percent to USD $1,784 per ton (on the ICE Futures New York, July 2017 delivery). Since the start of 2017 the cocoa price has fallen 15.56 percent.
Indonesia's cocoa bean production is expected to rebound to 375,000 metric tons in 2017 provided weather conditions are conducive. In 2016 cocoa bean output is estimated to fall 7 percent due to weather conditions that harmed the cocoa trees. Zulhefi Sikumbang, Chairman of the Indonesian Cocoa Association (Askindo), said the El Nino (which brought droughts to Southeast Asia) and the subsequent La Nina (which brings wetter-than-usual weather conditions) are reason why Indonesia will only produce around 350,000 tons of cocoa in 2016.
The Indonesian Cocoa Association (Askindo) expects that Indonesia's cocoa exports will decline 37 percent to 25,000 tons in 2016 from an estimated 40,000 tons this year. As such, Indonesian cocoa exports are set to continue their slide. In 2014 Indonesia still exported a total of 63,334 tons of cocoa. The country's cocoa exports have been falling as the government set a tougher tax regime since mid-2014. The export tax for cocoa is 10 percent, VAT at 10 percent and the income tax is 0.5 percent. Meanwhile, low domestic cocoa production is also partly responsible for the lower export performance.
At the Triannual Cocoa Dinner, held in JW Marriot London, Indonesian Vice President Jusuf Kalla said to see both opportunities and challenges in Indonesia’s cocoa industry. Currently, Indonesia produces about 700,000 tons of cocoa per year and is the world’s third-largest cocoa producer (after Ivory Coast and Ghana). Around 1.2 million hectare of land is used in Indonesia for the production of this commodity (the majority of these plantations are found concentrated in Central Sulawesi where about half of the country’s cocoa is produced).
Chances of chocolate-based candy or food products becoming more expensive in the near future have grown due to the weak harvest in Ghana, the world’s second-largest cocoa producer. Most likely, the country will fail to fulfill sales contracts hence leading to higher global cocoa prices. In New York and London cocoa futures jumped roughly seven percent in recent weeks. Meanwhile, Indonesian cocoa exports declined 56 percent (y/y) in April 2015. The main cocoa producing regions have been struggling with bad weather and diseases.
Major chocolate producers recently warned that worldwide economic growth in combination with global population growth will result in a cocoa deficit in a few years hence prices of chocolate are estimated to rise. Especially chocolate consumption in China has risen robustly in recent years. In 2010, the population of China consumed 40,000 tons of chocolate. However, this has now risen by 75 percent to 70,000 tons. Moreover, consumption of dark chocolate, which contains a higher degree of cocoa, has grown in the USA.
Indonesia’s cocoa bean production is expected to range between 500,000 and 700,000 tons in 2015 according to the Indonesian Cocoa Industry Association (AIKI), up from an estimated 485,000 tons in 2014. Earlier, the Indonesian government pledged to launch a USD $95 million cocoa revitalization program in the second quarter of 2015 in an ambitious attempt to double the nation’s cocoa output within a two year period. Indonesia’s Agriculture Ministry targets domestic cocoa bean output of at least one million tons per year.
Contrary to most other (agricultural) commodities, the global price of cocoa has increased in the second half of 2014. While prices of commodities such as oil, soybeans, corn and wheat have eased due to robust global supply, and others - such as cotton - have eased amid lower global demand, the price of cocoa has been rising steadily. Despite a weak start in 2014, the cocoa price has grown over 10 percent (after having rallied around 25 percent in 2013). Main reason for this performance is the world’s rising cocoa demand.
Latest Columns Cocoa Production
In March 2024 global cocoa prices reached record highs (even temporarily touching above USD $10,000 per ton). Considering Indonesia ranks among the world’s top cocoa bean producers it is certainly worthwhile to take a closer look at this issue.
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