ASIAN COCOA PRODUCERS EXPAND DESPITE CRITICS
  Asian cocoa producers are expanding
  output despite depressed world prices and they dismiss
  suggestions in the London market that their cocoa is inferior.
      "Leading cocoa producers are trying to protect their market
  from our product," said a spokesman for Indonesia's directorate
  general of plantations. "We're happy about our long-term future."
      Malaysian growers said they would try to expand sales in
  Asia and the United States if Malaysian cocoa was not suitable
  for European tastes.
      They were responding to comments by London traders that
  large tonnages of unwanted cocoa beans from Malaysia, Indonesia
  and Papua New Guinea (PNG) were helping to depress cocoa
  prices.
      London traders said the Asian cocoa was considered
  unsuitable for western palates because of an acrid odour and a
  high level of free fatty acids.
      Ng Siew Kee, the chairman of Malaysia's Cocoa Growers'
  Council, said Malaysia should expand its sales to Asia and the
  United States if it did not produce a type suitable for Western
  Europe.
      A spokesman for the PNG Cocoa Industry Board said the
  London market was mistaken if it linked PNG cocoa with
  high-acid Malaysian and Indonesian beans.
      "When the market is declining, buyers seize on anything to
  talk down prices," the spokesman said.
      He said that PNG could sell whatever cocoa it produces.
      PNG exported 33,000 tonnes of cocoa in the 1986/87 cocoa
  year ending September 30, of which nearly 50 pct was exported
  to West Germany, 16 pct to the U.S. And the rest to the
  Netherlands and Britain.
      The Indonesia spokesman, an Agriculture Ministry official
  who wished not to be identified, said Indonesia had no problem
  with quality and would continue to expand sales. He described
  criticism of the quality of Indonesian beans as "trade politics"
  and said Jakarta's traditional links with Dutch buyers meant it
  did not have any difficulty with exports.
      Indonesia and Malaysia, Asia's two biggest commodity
  producers, are expanding cocoa output and are both outside the
  International Cocoa Organization (ICCO).
      Officials have said Malaysian production is expected to
  total 150,000 to 155,000 tonnes in calendar 1987.
      This is up from 131,000 tonnes in 1986, partly because of
  the end of a three-year drought in Sabah, the country's largest
  cocoa growing area.
      Production of Indonesian cocoa beans tripled to 31,600
  tonnes in calendar 1986 from 10,284 tonnes in 1980. Output is
  projected to rise to 50,000 tonnes in 1988 from 38,000 tonnes
  this year as young trees mature.
      Both Malaysia and Indonesia are low cost producers and
  traders said they could last out low prices longer than West
  African countries.
      According to one Kuala Lumpur trader, world prices would
  have to fall another 1,000 ringgit per tonne (about 250 stg) to
  make cocoa production in Malaysia uneconomic.
      Some traders believe the main quality problem is with
  harvesting and fermentation techniques.
      One trader said Malaysian cocoa is virtually
  indistinguishable from West African output if treated in the
  same way but this is not possible on the larger Malaysian
  estates.
  

