Old Farmers, Aging Trees Get Blame for Indonesia’s Cocoa Misery

(Bloomberg) -- Cocoa plantations in Indonesia are passing through a bitter phase, and the bulk of the blame falls on old farmers and aging trees.

Cocoa bean production in the world’s third-biggest producer of the chocolate ingredient may slump about 7% from 2018 to a record low of 260,000 tons this year, Arie Nauvel Iskandar, chairman of the Indonesia Cocoa Association, said in Jakarta.

“We’re facing the same problem -- old trees and old farmers,” Iskandar said. “They can’t do the same work as when they were younger. Their productivity is low.”

Bean output in the country, which is also Asia’s top producer, has shrunk by half in the past decade as farmers battle crop disease and aging trees and switch to more profitable crops. That’s turned the country into a net bean importer from a major exporter, with overseas purchases more than doubling in five years.

Record Imports

Cocoa yields are decreasing every year and that’s hurting production, Iskandar said. The country has 11 cocoa processors with a total installed capacity of 750,000 tons, but they’re only running at a capacity of 56% because of the shortage of beans, he said.

“Naturally, bean imports will increase,” he said, without providing an estimate.

Indonesia bought about 240,000 tons of cocoa beans last year, a record, and may import more in 2019, Piter Jasman, chairman of the Cocoa Industry Association, said in May.

The government is trying to help farmers in different ways. It will start providing a special fertilizer suitable for cocoa trees starting next month to help boost output, Iskandar said. The move comes at a good time as farmers are dealing with longer-than-usual dryness, a condition that may have a negative impact on production in the coming years, he said.

Iskandar said the association is finalizing a national program to raise output and improve the livelihood of farmers. He had said last year that the program was aimed at raising the country’s production to 600,000 tons by 2024, enough to meet local demand and for exports.

To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash

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