A US rule on “automatic detention” is costing the Indonesian cacao industry US$90m every year, according to Agricultural Minister Bungaran Saragih. “We need to improve the quality of Indonesian cacao,” concluded Saragih, explaining that the US imposes the rule on cacao imports on the grounds of poor quality.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The country is also losing money in its European imports, said the minister, because the commodity is often found to be poorly fermented.
Saragih remains confident that if quality is improved, Indonesian cacao can still retain its market share in the US and compete with other producers because of its popular characteristic taste.
According to Zulhefi Sikumbang, secretary general of the Indonesian Cacao Association (Askindo), however, production faces serious problems because of a pod borer disease. The disease is currently affecting plants on over 60,000 hectares and it is growing at a rate of 10% a year. At that rate, Indonesia’s plantations will be reduced by 50% over the course of the next five years.
After rubber, palm oil and coffee, cacao is Indonesia’s fourth largest commodity in terms of foreign exchange earnings. In 2000, Askindo compiled data showing that 40% of exports went to the US, amounting to 125,500 tons.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
