YOUR CHOCOLATES TO COST MORE?

I cant blame Bloomberg for bleak news. It seems to be the trend these days. But they reported yesterday that our(Indonesia's) cocoa production could fall by as much as 21% in three years. Due to diseases infecting crops. That not a small bunch of beans nor small in consequences considering that Indonesia is the third largest producer of cocoa beans in the world.

Bloomberg quotes Halim Razak, Chairman of the Indonesian Cocoa Association who said yesterday that annual production could fall as much as to 380,000 to 400,000 tons if the diseases are not contained.

The cocoa trees have suffered from the blight of the pod borer larvae the late rains and late flowering and the Vascular Streak Dieback disease.It is very serious because 60 percent of trees in Sulawesi, Indonesia's main cocoa producing region, have been infected.

Halim Razak said yields can fall to 380kg a hectare, from the current 500.

Yesterday's Cocoa for December Delivery fell 2.1 percent to $2,540 a ton on ICE Futures US. The most active contract reached $3,290 a ton the highest in twenty years.

Earlier the International Cocoa Organisation had predicted that Indonesia's cocoa production for 12 months, ending October may only total 480,000 tons. Indonesia produced 530,000 tons in 2007.

Last month Mars Inc, makers of M&M and Snickers, said it was girding up to persuade cocoa farmers in Indonesia to raise production by planting cloned seedlings. The Company confidently stated that cocoa has a definite future in this country. Mars is working in Sulawesi as part of a sustainability programme funded by the Indonesian Cocoa Association, Australia, Belgium, Germany, the Indonesian Government, Switzerland, the Netherlands and the International Finance Corporation.

The Indonesian Government Ministry of Industry handbook( the best I have seen) commits that Sulawesi will be developed as a cocoa producing center.

Crop diseases may cost the Indonesian Farmer as much as $388million in output losses.

Mars Symbioscience coordinator Mohd. Hussin Purong said last month that his team was trying to persuade farmers to prune or cut down diseased trees and teaching them the benefits of composting to improve yields. Compositing has revived some trees and farmers are prepared to learn about clones derived from disease resistant strains.

On the market front Hershey's have already raised prices amidst rising costs.