Indonesia Contemplates Export Tax on Cocoa

It’s the age old story that pits local processors against exporters. The Indonesian Cocoa Processing Association can’t get enough cocoa to keeps its members busy. Global demand (and global prices) are diverting local cocoa away from the processors. So they want 5 percent export tax on cocoa to provide an incentive for cocoa producers to sell their beans locally.

Not surprisingly, the Indonesian Cocoa Association is rather unhappy about that proposal, claiming that it will hurt farmers who will lose out on better world market prices. The Indonesian Chamber of Commerce support the export tax, claiming that local processing creates jobs and value added. At the moment, it looks like the tax will come. The only debate is the rate.

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