Indonesia's Ministry of Agriculture reports a decline in local cocoa plantation productivity over the past year. This decrease is primarily attributed to farmers shifting their land use to more quickly profitable food commodities like palm oil, leading to a reduction in the number of cocoa farmers and total planted area. The unattractive selling prices of cocoa beans in previous years also contributed to this shift.
To counter this trend and reduce import dependency (which has seen 340,000 tons of fermented cocoa imported, with imports increasing over the past five years), the Ministry of Agriculture is pushing for significant plant rejuvenation and land expansion. In 2025, there's a budget for rejuvenating 3,800 hectares and expanding land by 650 hectares, along with an additional spending budget for 4,266 hectares. Looking ahead, the Ministry aims to rejuvenate a substantial 175,000 hectares in 2026 and 68,734 hectares by 2027.
Currently, Indonesia possesses 1.3 million hectares of cocoa land, with 890,000 hectares productive, 290,000 damaged, and 212,000 yet to produce. The country has 1.5 million cocoa farmers, with 60% of production concentrated in four Sulawesi provinces. The government is also focusing on downstream processing to increase the value of cocoa products, moving beyond raw material exports. This strategy is expected to bring greater benefits to farmers and enhance competitiveness in global markets like Australia, especially with growing opportunities and the Indonesia-Australia Comprehensive Economic Partnership Agreement.
Reinforcing these efforts, the Ministry of Finance's Plantation Fund Management Agency (BPDP Kemenkeu) has a national target to rejuvenate 5,000 hectares of cocoa plantations by 2026. While the budget per hectare is not yet finalized, BPDP will fully support the program, drawing from national APBN funds. The process of rejuvenating cocoa plantations takes time, with a harvest period of 3-4 years, meaning annual production results won't be immediately visible. In other related news, Indonesia's Q2 cocoa grinding saw a 30% quarter-on-quarter increase, according to the industry ministry.
