Association leaders are expecting the government’s decision to impose an export tax on cacao beans early this month will help the country’s cocoa processing industry.
“The cacao tax policy will revive the cacao industry,” Indonesian Cacao Industry Association (AIKI) chairman Piter Jasman told a press conference in Jakarta on Tuesday.
Under decree No. 67/2010, dated April 1, the Finance Minister imposes a 5 percent tax on cacao beans exported at prices between US$2,000 and $2,750 per ton. This tax rate is increased to 10 percent for beans sold for more than $2,750 per ton.
According to the Association of Indonesian Fermented Cacao Producers (AKFI), cacao prices have remained stable on the domestic market, at between Rp 21,000 and Rp 22,000 per kilogram.
However, farmers say the export tax had increased the price of cacao beans.
Piter said the tax policy would benefit not only the cocoa industry but also cacao farmers who now had more options in selling their beans.
“Instead of depending on exports, farmers now have the option to sell their beans to domestic processors,” he said.
Piter suggested the government use funds gathered from the cacao tax to help cacao farmers, particularly to improve both their productivity and quality of their produce, considering that almost 90 percent of the cacao plantations in Indonesia are owned by individual farmers.
The funds collected from the export tax could be returned to cacao farmers to increase their production, he said.
Piter hoped that companies that traditionally exported cacao beans would promote exports of fermented or processed cacao, whose global demand had increased continually over recent years at 5 percent per year. In 2009, the global demand for cacao was estimated at 3.5 million tons a year.
With more exports of processed cacao products, local producers of fermented and processed cacao could also rely more domestic beans (rather than imports), he said.
Piter said the Indonesian cacao industry still imported about 30,000 tons of fermented cacao beans and 10,000 tons of cacao powder. Yet, these imports still did not fulfill the demand in the food industry.
“We have to take advantage of exports of fermented or processed cacao, which has a higher value than unprocessed produce,” he said.
Speaking on the sidelines of the press conference, Industry Minister MS Hidayat said the cacao-based product industries offered the highest added value in the country, followed by CPO, rubber and other products.
The Association of Cacao Producers (Askindo) has estimated that Indonesia’s cacao production to increase to 500,000 tons this year from about 480,000 tons last year, thanks to replanting program and intensification programs in a number of plantations across the country.
The association also estimates that cacao exports will reach 380,000 tons this year from about 350,000 tons last year. Most of Indonesia’s cacao plantations are located in Sulawesi and Sumatra.
