Indonesia's 2013 cocoa exports to drop 14 pct y/y -industry body

Reuters

* Cocoa body sees Indonesia's 2013 exports at 140,000 T

* Cuts Indonesia's output forecast to 430,000 tonnes

* Sulawesi mid-crop likely to fall short of previous year

By Michael Taylor

JAKARTA, Nov 4 (Reuters) - Indonesia's cocoa exports areexpected to drop about 14 percent from a year ago to 140,000tonnes in 2013, said an industry body, which also reversed itsearlier forecast for a rise in output, citing crop-damaging wetweather.

A drop in shipments and weak output from the world's No.3cocoa producer after Ivory Coast and Ghana should underpinglobal prices, which last month hit a two-year high in amarket bracing for a deficit in the next four years.

"Heavy rains in Indonesia have hurt the cocoa crop - thereare many black pods and instances of the cocoa pod borerdisease," Zulhefi Sikumbang, chairman at the Indonesian CocoaAssociation (ASKINDO), told Reuters in an interview.

Bean exports by the country are expected to hit 140,000tonnes in 2013, data from ASKINDO showed, up 40 percent from itsprior forecast but still below last year's 163,501 tonnes.

Output will drop 6 percent to 430,000 tonnes this year from456,000 tonnes last year, Sikumbang told Reuters. ASKINDO hadpreviously estimated 2013 cocoa output at between 450,000 and500,000 tonnes.

Production of other farm commodities in Indonesia has alsobeen hit by heavy rains this year. The country has slashed itswhite sugar output forecast while benchmark palm oil prices climbed to a one-year high last week on concerns aboutsupply from the top producer.

Indonesia has struggled to increase cocoa production inrecent years as its ageing trees, most of them planted in the1980s, are vulnerable to disease that is hard to stamp outbecause of a vast network of smallholders.

The harvest of the main cocoa crop in Indonesia usuallystarts in April and peaks in July and August, before a smallerharvest, known as the mid-crop, begins in October or November.

"Compared to last year it is not good," Sikumbang said,referring to the mid-crop in the main growing island ofSulawesi.

Sulawesi beans traded at $180 a tonne below New Yorkfutures, however, Sikumbang said, as a government tax haddiscouraged exports and eroded overseas demand. The beanstypically trade at a premium to New York prices.

LIFTS COCOA IMPORT FORECAST

Indonesia instituted a monthly export tax for cocoa beans inearly 2010 to encourage local grinding and feed a growingregional appetite for chocolate products.

The country is Asia's No.2 cocoa grinder after Malaysia andis drawing companies such as Cargill and top chocolatemaker Barry Callebaut to invest in grinding plants.

Higher domestic grinding capacity may further curbIndonesia's cocoa exports, which ASKINDO data show are likely todrop to 100,000 tonnes in 2014.

No further details were available on ASKINDO's exportestimates, released after Sikumbang's interview.

Cocoa imports by Indonesia, mainly from Africa and used forblending, will jump to 50,000 tonnes this year from 34,000 in2012, Sikumbang said, higher than a previous forecast of 40,000tonnes.

A three-year $350-million government programme to revive thecocoa industry ended last year without boosting output,Sikumbang said, adding that a cheaper and better way to increaseyields would be to teach farmers improved techniques.

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