Cocoa beans have begun arriving in Indonesia's main cocoa port of Makassar on Sulawesi island as the mid-crop starts, but heavy rains and the spread of a deadly fungal disease have damaged quality, industry sources said on Monday.
Indonesia is battling Vascular-Streak Dieback that attacks leaves, branches and trunks and is spreading rapidly in the provinces of South, Central and Southeast Sulawesi, which account for 75 percent of Indonesia's cocoa production. The mid-crop harvests last from mid-September to December.
"The mid-crop has begun in several places. But because of the many problems faced by our cocoa industry, volume is not encouraging," Dakhri Sanusi, secretary of the Indonesian Cocoa Association (Askindo), told Reuters in Makassar, the provincial capital of South Sulawesi.
Indonesia, the world's third-largest cocoa producer after Ivory Coast and Ghana, is expected to see output falling to 480,000 tonnes in 2008, from 520,000 tonnes in 2007 after the fungal disease killed hundreds of cocoa trees in plantations across Sulawesi, according to Askindo.
"Volume is not as big as it used to be. We received two trucks of beans today, which is about 30 tonnes. But in the past, at least 5 trucks would unload beans into our warehouses a day when the mid-crop started," said a dealer in Makassar. "Both quality and quantity have definitely declined. Bean count is between 115 and 120. It's impossible to meet the national standard, "he said.
Bean counts are used to measure quality. A lower bean count indicates good quality beans, and the national standard for bean counts in Indonesia is 110 beans per 100 grams. The VSD is another blow to the cocoa industry in Indonesia, which has been battling another disease, cocoa pod borer, since 1980s. Pod borer is a worm-like pest which feeds on cocoa beans.
Prices of Sulawesi's fair-average cocoa beans were steady at between 21,000 and 21,700 rupiah a kg in Makassar, and some exporters reported daily arrivals of between 50 and 100 tonnes in the past week. "The mid-crop may last until December but it doesn't start simultaneously here in Sulawesi. I don't think we are going to see a peak because of the problems with disease," said the dealer in Makassar.
Cocoa prices have risen to their highest level in more than 20 years because of concerns about the size of the crop in Ivory Coast and Indonesia. The disease forced the International Cocoa Assocation (ICCO) to slash Indonesia's cocoa output in the 2007/08 crop year by 16 percent to 480,000 tonnes and revise up a global supply deficit.
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