Makassar, Indonesia, Sept 17 - Cocoa grindings in Indonesia are likely to increase 8 percent this year as the country capitalises on growing demand from China, the United States and Europe, a senior industry official said on Wednesday.
Indonesia, Asia's second-largest grinder after Malaysia, is expected to process 178,000 tonnes of beans this year, up from 165,000 tonnes in 2007, said Piter Jasman, chairman of the Indonesian Cocoa Industry Association.
"China will become the main buyer of Indonesia's cocoa products in the future because of its big population, high economic growth and growing awareness that chocolate is good for health," he told Reuters in a statement sent by email.
"There's a potential for a tremendous growth in consumption because the current per capita consumption is still low at 0.06 per kg per year," said Jasman, who also owns Indonesia's third-largest cocoa grinder, PT Bumitangerang Mesindotama, in West Java.
Grinders process beans into butter and cake, which is then pressed into powder. Butter is a key ingredient for chocolates, while powder is used in coating in chocolate making, biscuits, ice cream and beverages.
Indonesia is also the world's third-largest cocoa producer after Ivory Coast and Ghana.
Indonesia exported around 24,000 tonnes of cocoa products, including butter, powder and beans, to China in 2007, up from around 22,000 tonnes in 2006, according to official data.
China's 6.46 billion yuan ($922 million) chocolate market is growing more than 10 percent each year due to rising wealth and increasing Western influence on consumer tastes, according to intelligence company Euromonitor International.
U.S. IMPORTS
"Grindings will increase because since Jan. 1, 2007, China no longer imposed taxes for importing cocoa products. The U.S. chocolate industry, which used import beans from Indonesia, has shifted to importing cocoa products," Jasman said.
Cocoa bean exports to the United States from Indonesia dropped 60 percent to around 53,000 tonnes in 2007 but shipment of cocoa powder and cake increased, official data show.
The United States is the world's largest market for chocolate confectionary, and Indonesia is also hopeful on selling more cocoa products to Europe, where cocoa butter imports rose around 9 percent to around 22,500 tonnes in 2007.
In addition to China, India and the local market in Indonesia also have a big potential, said Jasman.
"Looking ahead, we will focus on marketing cocoa products in the local market, China and India. The three countries have a huge population but per capita chocolate consumption is still low at 0.06 kg per per annum," he said.
A lack of fermented cocoa beans from Indonesia has remained a problem for grinders in Indonesia, but would be balanced by imports of good quality beans from West Africa, Jasman said:
"We can expect imports to reach 25,000 tonnes in 2008."
Indonesia imported around 20,000 tonnes of fermented beans from West Africa in 2007, down from 27,000 tonnes in 2006, when grindings in Indonesia were estimated at 141,000 tonnes.
Only about 25 percent of Indonesia's cocoa bean output is fermented, a time-consuming process which enhances flavour.
Indonesia's cocoa output is projected to fall to 480,000 tonnes in 2008 from 520,000 tonnes in 2007 due to the spread of a deadly fungal disease in the main growing island of Sulawesi.
Cocoa butter was quoted a ratio of 2.65 times London futures , steady from last week.