Jakarta, Aug 6 - Indonesia will replant 70,000 hectares of cocoa trees which have been infected by a deadly fungal disease spreading through the main cocoa-producing island, the agriculture minister said on Wednesday.
Indonesia, the world's third-largest cocoa producer, has been struggling to increase output, but its ageing cocoa trees are vulnerable to pests and disease.
"We need to take action to overcome the problem facing cocoa in Sulawesi. The areas need to be rehabilitated, with planting of new trees," Anton Apriantono told reporters after a meeting with Vice President Jusuf Kalla.
He said 450,000 hectares planted with cocoa trees in Sulawesi have been affected by vascular-streak dieback (VSD), a fungal disease, of which about 70,000 hectares will be replanted.
Replanting and rehabilitation of cocoa trees will cost about 3.2 trillion rupiah ($353 million) between 2009-2011.
VSD has dealt a further serious blow to Indonesia's cocoa industry, following attacks by a pest, the cocoa pod-borer, since the 1980s. The pod-borer is a worm-like pest which feeds on cocoa beans.
Cocoa prices have surged to the highest level in about 20 years on concern about crop size and quality in top grower Ivory Coast and in Indonesia.
Indonesia is now expected to produce 480,000-490,000 tonnes of cocoa this year, well below a forecast in May of 520,000 tonnes, because of the spread of VSD which attacks branches, leaves, and tree trunks.
Indonesia exported 379,829 tonnes of beans in 2007, state statistics show.
Shipment to Malaysia, Southeast Asia's largest cocoa grinder, accounted for nearly 50 percent of Indonesia's total cocoa bean exports. The beans are sold to grinders for processing into butter and cake, which is later pressed into powder to make chocolate, cakes, beverages and ice cream.