Indonesia urges europe to reduce import tax on cacao

Indonesia urges europe to reduce import tax on cacao

Vice President Jusuf Kalla (ANTARA FOTO/AACC2015/Fanny Octavianus)

London (ANTARA News) - Indonesia has urged the Federation of Cacao Commerce (FCC) to reduce tax on cacao imports from Indonesia to Europe.

"We are demanding equal treatment. There should be no discrimination against processed cacao products from Indonesia. Tax of about five to six percent is imposed on our cacao, but no tax is levied on cacao imported from Africa," Indonesias Vice President Jusuf Kalla stated here on Thursday.

Kalla is visiting London to attend the FCC conference scheduled to be held here on Friday and to meet business leaders from the region.

As the worlds third-largest cacao producer, he noted that Indonesia has the potential to increase exports of the commodity to the European markets.

However, Indonesia has so far faced difficulties in exporting the commodity to the region due to the imposition of a high import tax, he pointed out.

"The price of almost all commodities has declined recently except cacao, which implies that there is potential for an increase in the demand for cacao and its processed products. We view this as a potential area as Indonesia is the worlds third-largest cacao producer," he emphasized.

Indonesia is the worlds largest producer of cacao beans after Ghana and Ivory Coast. The production gap between Indonesia and Ghana is only around 50 thousand tons a year.

"Our cacao bean production is recorded at 700 thousand tons a year while Ghana, the second-largest producer in the world, produces 750 thousand tons. Our target is to increase the production by 50 percent to meet the export demands in 2020," the vice president explained.

He expressed optimism that the welfare of cacao farmers in the country can be improved by increasing production.

"About 95 percent of the cacao production comes from farmers. This is a good thing as the distribution is good, and the income goes directly to the farmers," he said.

Vice President Jusuf Kalla emphasized that his mission to attend the conference was to increase cacao business in Indonesia, so that the commodity can expand its base in the European markets.

"Cacao is our third-largest export commodity after palm oil and rubber. The price of almost all commodities has dropped recently except cacao, which indicates that the global demand for cacao is increasing," he affirmed.

He stated that Indonesia has huge potential in cacao production as not many countries in the world have cacao plantations.

"Not many countries can produce cacao as only those with a tropical climate can produce it, and thus, we have a significant advantage," he added.

Reporting by Fransiska Ninditya