Coffee prices today - 2016 Indonesia coffee production estimate: Indonesian coffee production may fall to a two-decade low next year if the drought continues within the next few months, according to the Association of Indonesian Coffee Exporters and Industries (AEKI).
AEKI deputy chairman Theng Hong Sioe said on Thursday that if rain did not fall until December or January, coffee bean production would fall to 400,000 tons next year, the lowest level since 1990.
The 2016 production estimate would be about 12 percent lower compared to this year’s production estimate of 450,000 tons, or about 20 percent below the 2016 initial target of 500,000 tons.
Theng noted that if production reached 400,000 tons next year, it would be a pleasant surprise because the drought could continue until early next year.
“If the rain does not fall by the year’s end, coffee bean production will probably plunge by 30 or 40 percent from next year’s target of 500,000 tons,” he said at the International Coffee Day event held by the Industry Ministry.
El Niño can cause droughts, floods and fluctuating crop yields in the Pacific equatorial region, including Indonesia. Almost all crops have been severely affected by the drought which has hit Indonesia since the middle of the year.
The association estimates this year’s coffee production would plunge by 34.5 percent to 450,000 tons from 685,000 tons.
Saimi Saleh, another AEKI deputy chairman, said that the production slump was expected to result in higher coffee prices next year.
“For robusta coffee, I’m not sure [if prices will go up], but I believe that prices for arabica coffee will surge as the demand will remain high,” he said.
The Industry Ministry’s director for beverages and tobacco, Faiz Achmad, said that demand for Indonesian Arabica coffee from the US and Europe showed an upward trend in recent months.
“We hope that the Agriculture Ministry takes this opportunity by carrying out intensification and expansion programs for Arabica coffee,” he told reporters.
Presently, Indonesia’s coffee plantation areas covered 1.24 million hectares (ha) of land across the archipelago. Robusta coffee crops made up 933,000 ha of land, while the remaining 307,000 ha were Arabica coffee crops, according to the Industry Ministry’s data.
The country produced 685,000 tons of coffee beans last year, or 8.9 percent of the world’s total coffee production. Brazil was the largest coffee producer with an output of around 2.7 million tons.
For Indonesia, coffee has become the fourth largest foreign exchange (forex) reserves earner after palm oil, rubber and cocoa, with total earned reserves from coffee standing at US$1.4 billion.
While the country exports mainly raw coffee beans, its processed coffee industry has been growing in line with a growing number of coffee lovers in every city nationwide.
Exports of processed coffee rose by 18.3 percent to 99,565 tons last year from 84,239 tons in 2013, with imports falling by 7.2 percent year-on-year (yoy) to 15,307 tons last year, according to data from the Industry Ministry.
In another development, the government plans to impose a national standard on processed coffee products by January of next year to keep coffee lovers away from low-quality coffee.
In July, the Finance Ministry also imposed a 20 percent duty on imported processed coffee, including roasted and ground coffee
AEKI deputy chairman Theng Hong Sioe said on Thursday that if rain did not fall until December or January, coffee bean production would fall to 400,000 tons next year, the lowest level since 1990.
The 2016 production estimate would be about 12 percent lower compared to this year’s production estimate of 450,000 tons, or about 20 percent below the 2016 initial target of 500,000 tons.
Theng noted that if production reached 400,000 tons next year, it would be a pleasant surprise because the drought could continue until early next year.
“If the rain does not fall by the year’s end, coffee bean production will probably plunge by 30 or 40 percent from next year’s target of 500,000 tons,” he said at the International Coffee Day event held by the Industry Ministry.
El Niño can cause droughts, floods and fluctuating crop yields in the Pacific equatorial region, including Indonesia. Almost all crops have been severely affected by the drought which has hit Indonesia since the middle of the year.
The association estimates this year’s coffee production would plunge by 34.5 percent to 450,000 tons from 685,000 tons.
Saimi Saleh, another AEKI deputy chairman, said that the production slump was expected to result in higher coffee prices next year.
“For robusta coffee, I’m not sure [if prices will go up], but I believe that prices for arabica coffee will surge as the demand will remain high,” he said.
The Industry Ministry’s director for beverages and tobacco, Faiz Achmad, said that demand for Indonesian Arabica coffee from the US and Europe showed an upward trend in recent months.
“We hope that the Agriculture Ministry takes this opportunity by carrying out intensification and expansion programs for Arabica coffee,” he told reporters.
Presently, Indonesia’s coffee plantation areas covered 1.24 million hectares (ha) of land across the archipelago. Robusta coffee crops made up 933,000 ha of land, while the remaining 307,000 ha were Arabica coffee crops, according to the Industry Ministry’s data.
The country produced 685,000 tons of coffee beans last year, or 8.9 percent of the world’s total coffee production. Brazil was the largest coffee producer with an output of around 2.7 million tons.
For Indonesia, coffee has become the fourth largest foreign exchange (forex) reserves earner after palm oil, rubber and cocoa, with total earned reserves from coffee standing at US$1.4 billion.
While the country exports mainly raw coffee beans, its processed coffee industry has been growing in line with a growing number of coffee lovers in every city nationwide.
Exports of processed coffee rose by 18.3 percent to 99,565 tons last year from 84,239 tons in 2013, with imports falling by 7.2 percent year-on-year (yoy) to 15,307 tons last year, according to data from the Industry Ministry.
In another development, the government plans to impose a national standard on processed coffee products by January of next year to keep coffee lovers away from low-quality coffee.
In July, the Finance Ministry also imposed a 20 percent duty on imported processed coffee, including roasted and ground coffee
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