JAKARTA (Commodity Online) : Indonesia’s decision to extend export duties on agricultural commodities is heating up as it begun looking into specific treatment for each type of commodity.

An intense debate is currently ongoing on the export duty for cocoa. Indonesia is the world's largest cacao producer after Ivory Coast and Ghana with an estimated production of 600,000 tons a year.

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The Indonesian Cocoa-processing Industry Association (AIKI) argues that a growing global demand for Cocoa has deprived local industries of reliable supply, and thus a 5 percent tax on exports is justified.

The Indonesian Cacao Association responded by saying export duties on cocoa would hurt farmers as they would lose out as the global market offered better pricing on their commodity.

It argued the government had failed to increase the national Cocoa production output from currently 400 kilograms per hectare annually to an ideal output of 1,000 kilograms per hectare per year.

Country’s agriculture ministry has hinted that a fixed rate of export duty may be more suitable than a progressive rate such as that currently imposed on crude palm oil, Indonesia's major agriculture export.

The ministry has been imposing zero export duties on Crude Palm Oil since August because global crude palm oil prices are still low, hampered by the global economic downturn.

Indonesian Chamber of Commerce and Industry had proposed the government to impose export duties on 10 raw agricultural commodities, including cocoa, Coffee and sugar, to promote domestic processing industries.

Raw commodities should be used to support the domestic processing industry, which is labor intensive, instead of being exported. Indonesia will also earn added value from processed commodities when they are sold here, it said.

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