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Cocoa Output From Indonesia May Fall 13% This Year, Group Says
Eko Listiyorini | June 10, 2011

A worker carries a sack of cocoa bean at a warehouse in Makassar, in Indonesia A worker carries a sack of cocoa bean at a warehouse in Makassar, in Indonesia's South Sulawesi province. Cocoa-bean output from Indonesia, the world’s third-largest producer, will likely fall 13 percent this year as wet weather and a fungal disease hurt crops in principal growing regions, according to an industry group. (Reuters Photo)
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Cocoa-bean output from Indonesia, the world’s third-largest producer, will likely fall 13 percent this year as wet weather and a fungal disease hurt crops in principal growing regions, according to an industry group.

Production may decline to 500,000 metric tons from about 575,000 tons last year, Dakhri Sanusi, secretary-general of the Indonesia Cocoa Association, said in a phone interview from Makassar in South Sulawesi, one of the main growing regions.

Lower supplies may help to support prices of the chocolate ingredient as the global market is forecast to flip from surplus to deficit. Rabobank International has said there may be a shortage of 30,000 tons in the year from October, compared with the International Cocoa Organization’s forecast for a 187,000 ton surplus in the current crop year.

There’s unlikely to be “a big harvest this current season as it’s hard to tell whether the weather will be favorable for the rest of the year,” Sanusi said yesterday. The main harvest, which normally runs April to June, has been delayed, he said.

Cocoa on ICE Futures U.S. in New York touched the highest level in two weeks yesterday on speculation that manufacturers may boost stockpiles. The September-delivery contract rallied to $3,050 per ton, the highest price since May 26, before ending at $2,970. Over the past year, the price is little changed.

Black pod is caused by a fungus that spreads on cocoa pods during the wet season under conditions of high humidity and a lack of sunshine. Poor farming practices by small growers, such as not trimming trees to reduce the shade in which black pod may thrive, have helped to spread the disease, Sanusi said.

Cocoa-bean exports from Central and South Sulawesi will likely reach 15,000 tons this month, the same amount as shipped in May, and may increase to 20,000 tons in July, Sanusi said. The weather has gradually improved in South Sulawesi and that province’s output may be good next month, he said.


Bloomberg