JAKARTA, Sept 18 Indonesia needs to lower its
cocoa bean import duties to help ward off a possible shortage of
the raw chocolate ingredient in 2015 after a successful drive to
increase domestic grinding capacity, the country's deputy trade
minister said on Wednesday.
Cocoa grindings in Indonesia, the third-largest cocoa bean
producer, are expected to rise 25 percent to 500,000 tonnes next
year, while bean output is expected at about the same level.
Grinding capacity, meanwhile, is already more than annual
bean production and is expected to continue to rise, according
to the Indonesian Cocoa Industry Association.
"Given that cocoa bean demand for domestic processing is
increasing significantly, we have to review our current import
policy," said Bayu Krisnamurthi, deputy trade minister told
reporters at an industry event on Wednesday.
Imports are currently subject to a 5 percent duty and cocoa
product imports are untaxed, and this should be reversed, said
Krisnamurthi, who was unable to give any details about when or
how such a tax change would be implemented.
But he warned that Indonesia may see a cocoa bean deficit in
2015 due to rising demand from the local processing industry.
As part of an initiative to encourage local grinding and to
feed a growing regional appetite for chocolate treats, Indonesia
instituted a monthly export tax for cocoa beans of up to 15
percent in April 2010.
That drew investment into processing facilities by such
firms as Cargill and Barry Callebaut and now the
grinding capacity is more than the cocoa supply.
Cocoa bean imports into Indonesia are relatively small, but
they are seen rising to about 40,000 tonnes this year, and then
almost doubling from there to 75,000 tonnes next year, according
to industry estimates.
That would still put the beans available from local output
and imports far below next year's processing capacity of 740,000
tonnes as forecast by the Indonesian Cocoa Industry Association.
Grinding capacity is forecast to hit an even higher 950,000
tonnes by 2015, Faiz Achmad, director of food and fisheries at
the Industry Ministry said, although government figures often
differ from industry and international estimates.
On the supply side, the cocoa industry in Indonesia is
looking to triple output of the bean by 2020.
(Reporting by Yayat Supriatna; Writing by Michael Taylor;
Editing by Tom Hogue)