at the end of 2014, Indonesia has experienced a sharp decline in part coffee exports due to adverse weather conditions. Is the price of commodities better this year?
The Indonesian coffee sector can thrive this year thanks to improving weather in producing areas across the country. But the increase in production may still not be enough to satisfy foreign and local demand, which is both currently on the rise, analysts say.
According to the Association of Indonesian Coffee Exporters (AEKI), the country harvested 700,000 metric tons of coffee beans annually 1.3 million hectares of cultivated area, with a growth rate of 1-2 percent annually. sales for export of goods, dominated by the Robusta strain that is normally used in instant coffee, is US $ 1.5 billion, the claims of the trade groups. Indonesia is the second producer of robusta beans in the world. The strain is growing strongly in South Sumatra in places such as Lampung, Bengkulu, and other neighboring provinces, while the Arabica bean dearest grows mainly in northern Sumatra and Java.
Photo by Victor Ulijn
"Indonesian coffee beans have a better quality and value compared to coffees from Brazil and Vietnam," says Irfan Anwar, AEKI president. "our coffee is now exported to 100 countries with our biggest importers from the United States, Europe and Japan."
industry experts provide the coffee harvest in Indonesia this year will increase to 800,000 tons. But the harvest season is expected to be later than normal due to mixed rain amounts in key growing areas of crops.
"Lack of rain could delay the harvest, while too much rain could degrade the quality of the beans," said Armia Zuhri, director of Sumatra Permata Gayo Cooperative in northern Sumatra. "The lack of rain [in Aceh] in December and January means the harvest was postponed to February, so [beans] accumulate this month. "the cooperative produces Zuhri fair Trade coffee 100 percent organic, and exports about 1500 kg of coffee year. Last year, the cooperative of US $ 10 million collected about 2,600 members, whose crops have been mainly exported to the United States, Europe and Australia.
Last year, Indonesia and neighboring countries as the second largest overall global coffee producer, Vietnam, climatic anomalies caused by El Niño. This eventually led to a decline in exports.
While prices Indonesian coffee beans on the world market fluctuated, Anwar said the price tag for the beans of the present archipelago to "more expensive" than coffee Brazilian Arabica with the sale of the south American nation to US $ 6 per kilogram and Robusta to $ 2.5 per kilogram.
The numbers at home are promising, too.
Coffee exports may have fallen from 20 to 25 percent to 475,000 tonnes last year, but higher local consumption can help to offset the loss in 2015.
AEKI predicted that local demand will jump 20 percent a year - from now 1.3 kg to 1.56 kg per capita next year. This slight net increase is driven by a penchant found a large "cup of Joe" - especially brewed from single origin specialty variants. - Among the richest of the country's middle class A variety of coffees premium can now be found in major cities of Indonesia, usually selling specialty bean bags harvested in provinces such as Flores, Gayo and Toraja.
"the trend is good to help local farmers deliver their coffee, "says Veronica Herlina sustainable coffee platform of Indonesia (Scopi), an organization that promotes public-private partnership in the coffee sector to enhance the sustainability of local goods." Indonesia has the largest specialty coffee in the world, because every soil, culture, all [piece of] land, helps form the characteristics of the beans. "Simple specialty coffee origin also helps increase the quality coffee in the country, she said.
Starbucks coffee giant also wants action. The Seattle-based company plans to double its number of stores in Indonesia from 200 to 400 existing outlets within five years, according to Starbucks Indonesia COO Anthony Cottan.
The trend is good news for all stakeholders in the industry, but new players may think twice before entering the enterprise Java already crowded country. If entrepreneurs took the traditional approach, they would compete head-to-head with veterans and household names like Kapal Api World, Sari Incofood Corporation (the owner of Indocafé) and other coffee players multinational such as Illy coffee Co. Ueshime Italy and Japan
However, Indonesia still needs to wake up and smell the coffee. Analysts and industry observers believe that local farmers may not be able to meet demand in an industry that is largely disrupted by climate change and the lack of sustainable development programs.
Photo by McKay Savage
Indonesia produces about 750 kilograms per hectare and is the third largest coffee producer in the world behind the giants of Brazil and Vietnam, which produce four tons and two tons per hectare, respectively. the largest economy in Southeast Asia is still sprint with Colombia, where the annual yield is roughly on par with Indonesia. This means that the number three position depends largely on weather conditions in both countries year after year.
"We aim to increase the production of one ton per hectare, or about a 25 percent of our current production by 2018 or 2020," said Anwar. "I think it is a realistic goal. "
To help achieve the target, AEKI recently signed a Memorandum of Understanding (MoU) with Vietnam Coffee and Cocoa Association. Under the MoU, the two countries will exchange information on coffee prices between the two markets, as well as to share techniques to increase productivity and profit, according to Anwar.
"Indonesia and Vietnam are the major coffee producing countries of the world, so we need to move our cooperation," said Anwar. "We can learn how to increase productivity and better marketing Vietnam. " cultivation area of Vietnam is smaller than Indonesia, with just over 600,000 hectares, but productivity levels and export of the country are higher. Every year, Vietnam exported a million tons of coffee beans, with a turnover of over US $ 3.4 billion.
to increase productivity, however, farmers, coffee companies and stakeholders in the company must also ensure that their sustainable agricultural practices. According to a research note published last year by TechnoServe and sustainable trade Initiative (IDH), Indonesia has three times more coffee producers smallholders as Vietnam, but only a third of the coffee yield: "low farmer output and highly fragmented nature of the Indonesia production base sustainability programs are much more expensive than Vietnam. "
The researchers also estimate that only seven percent of Indonesia's coffee exports are currently certified as" sustainable. "If the Indonesian coffee sector does not change its present course, and with exports down in importance, "sustainability efforts are likely plateau," said HDI.