The International Cocoa Organization just issued a report decreasing Indonesia’s prospective cocoa harvest for 2007/08 by 90,000 tons. Indonesia exported 530,000 tons of cocoa during for 2006/07 and the ICCO had projected exports to reach 570,000 tons this season.The current export volume is estimated to reach 480,000 tons.
According to Reuters, the decrease in the projected harvest is due to the breakout of a fungal disease–the Vascular-Streak Dieback disease. Causal factors for this outbreak are the age of the trees in Sulawesi and the unusually wet conditions.
“ICCO’s earlier forecast of 570,000 tonnes was too optimistic. I guess the revised number is more realistic and we know the quality of the beans is not good,” said an unnamed dealer in Singapore quote by Reuters. He went on to say that the market was well aware of Indonesia’s problems.
That is born out by the fact that cocoa prices did not increase significantly on the futures exchanges.Â It seems that the fluctuations of the U.S. dollar currently play a larger role in determining cocoa prices than the decrease in the Indonesian harvest.