Cocoa Butter Indonesia, also known as theobroma oil, is the pale fat extracted from the cocoa bean and can be consumed. Apart from being an ingredient for making chocolate, cocoa butter is also used as a raw material for making ointments, toiletries, and medicines.
Cocoa butter is Indonesia’s main export product for the American, Dutch, Indian, Estonian, German, and Chinese markets. The domestic cocoa processing industry has produced high-quality products in terms of taste and health benefits.
Cocoa Butter Indonesia Exported To America
The Indonesian Cocoa Association (Askindo) estimates that cocoa bean exports will reach 25,000 tons in 2016, down 37% from 40,000 tons in 2015. The decline is estimated to be due to a 10% export duty (BK) for cocoa exports. cocoa beans other than 10% value-added tax and 0.5% income tax.
Beware of World Cocoa Bean Supply Deficit
The supply of cocoa beans is one of the determining factors for the sustainability of the cocoa processing sector as an industrial raw material. The cocoa bean deficit has plagued many chocolate producers around the world. A report entitled Destruction by Chocolate illustrates that the world is experiencing a chocolate deficit. The demand for chocolate products is getting higher, especially in developing countries, but it is not matched by the supply of cocoa so that stocks are running low.
The taxes and levies imposed will affect the price of cocoa beans from farmers, which currently ranges between IDR 33,000 (US$2.43) and IDR 34,000 per kilogram. On the other hand, taxes and levies will have a positive impact on the downstream cocoa industry.
With the existence of export barriers in the form of BK and taxes, more and more local cocoa beans are available for the local market, in this case, the processing industry. The increase in the supply of domestic cocoa beans is accompanied by a local cocoa processing industry.
Decrease in Cocoa Bean Exports
Cocoa butter is one of the processed cocoa products that has benefited from the decline in cocoa bean exports. BK and Hot Issue Taxes allow for higher exports of cocoa butter. In 2015, exports amounted to 110,000 tons, an increase from 99,000 tons in 2014. Exports are expected to grow by 26.6% in 2016. Cocoa butter is mostly exported to Europe and the United States.
Indonesia’s cocoa butter business will still grow because the utility level of cocoa processing factories is only 50 percent, around 400,000 tons, from 20 factories. This year, the government targets to reach a utility level of 60% so that the production of processed cocoa, including cocoa butter, will increase and exports can be further boosted in the coming years.
Positive Trends in Cocoa Butter Exports
Cocoa butter is a cocoa derivative product that is grouped in the Harmonized System (HS) 1804 for Cocoa butter, fat, and oil. Indonesia no longer only exports cocoa beans but is also a leading exporter of cocoa butter, a processed cocoa product. Indonesia consistently ranks as the second-largest exporter of cocoa butter in the world with a market share of 12.47% as shown in the table of cocoa exporters below.
Indonesia has a positive trend of cacao butter exports of 31.88% in the 2011-2015 period. In 2011, the export value reached US$304.58 million and more than doubled to reach US$726.29 million in 2015. While in the first five months of 2016 it reached US$245.13 million.