The Problems in Cocoa Exportby Nadia Maharani Freelance Writer
Cocoa is one of Indonesia's main export commodities. However, there are some problems faced by the government of Indonesia where the cocoa export decreases significantly. Recommended Features
- Global warming
- The market demand
- Competitor's productivty
Review on The Problems in Cocoa ExportCocoa is one of the commodities with high demand in the global market. This is because cocoa is the raw material to make a variety of food and drinks from chocolate. Indonesia is one country that produces the commodity of cocoa to meet the market demand. However, now there are many factors that cause problems related to the export of cocoa from this region.
The phenomenon of global warming is starting to show its impact on the weather in different regions in the world; that includes the region of Indonesia. Recently, the weather in this region becomes unpredictable. Bad weather has made the production of cocoa decrease dramatically. Many cocoa farmers face crop failure. This condition causes the state revenue from cocoa exports significantly decrease as well.
The European financial crisis that occurred in the recent past has affected the market demand for this commodity. The demand for cocoa in European market is still low today. This makes the price of cocoa decrease significantly. Before the financial crisis occurred in Europe, the price of cocoa in Indonesia was $3 per kilogram. Today, the price of cocoa is only $1.5 per kilogram. Many cocoa farmers suffer heavy losses due to the selling prices of cocoa that are lower than the production costs.
The problems faced by the government of Indonesia in cocoa exports are also the impact of the high productivity of cocoa in Ghana and the Ivory Coast. Both countries are the largest cocoa exporters and dominate the global market. The low productivity of Indonesian cocoa causes it hard to face the competition with Ghana and Ivory Coast. At this point, the government should find the solutions of the problems. That way, the cacao farmers will no longer have to suffer losses.
Related to The Problems in Cocoa Export
Cocoa feels grind in commodities trading
Cocoa slumps in price in commodities trading as European demand falls away sharply
Created on Oct 23rd 2012 11:43. Viewed 1,180 times.