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7 April 2020 (closed)
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Indonesia's Agriculture Ministry expects the nation's coffee production to reach 674,636 tons in 2018, up a modest 0.9 percent year-on-year (y/y) from Indonesia's coffee production in 2017 (668,677 tons). If the ministry's estimate is correct, then it would be the second straight year of meager coffee production growth. From 2016 (when Indonesia produced a total of 663,871 tons) to 2017, growth of coffee production reached 0.7 percent (y/y).
Reasons behind such small growth are ageing and damaged coffee trees on Indonesian plantations as well as persistent low productivity (which lags far behind other big coffee producing nations such as Brazil and Vietnam). Meanwhile, unpredictable weather conditions are also an issue, and part of coffee farmers has switched to other crops in order to seek higher yields.
Based on the book "Plantation Statistics Indonesia, Coffee Commodity 2016-2017", Indonesia's coffee plantations cover a total of 1.25 million hectares. However, a total of 158,593 hectares is labeled "damaged". In other words, 12.7 percent of Indonesian coffee trees are damaged and therefore do not produce optimally in terms of quality and quantity.
Even more worrying is that the size of "damaged" coffee plantations is on the rise. Whereas in 2016 the figure reached 145,414 hectares, it rose to 154,540 hectares in the following year. Meanwhile, coffee production per hectare remained low and flat at around 700 kilogram per hectare over these years.
Irmijati Nurbahar, Directorate General of Estate Crops at Indonesia's Agriculture Ministry, said many Indonesian coffee farmers lack the the awareness or financial resources to invest in the rejuvenation of coffee trees. Moreover, their farming techniques are not efficient. More than 90 percent of total coffee plantations in Indonesia are cultivated by small-scale farmers who own relatively small plantations of about 1-2 hectares, each. However, a closer look at these plantations shows that these farmers are not efficient in terms of planting. For example, part of the land remains unplanted/uncultivated.
In 2018 the total budget for state-sponsored rejuvenation of plantations is IDR 1.63 trillion (approx. USD $116 million). However, only a (undisclosed) portion goes to the rejuvenation of coffee trees.
Meanwhile, the Indonesian Coffee Exporters Association (AEKI) expects Indonesia's coffee production to reach between 660,000-690,000 tons (approx. 11.0-11.5 million bags of coffee) in 2018, up from last year's production on the back of better weather conditions. Exports, however, are expected to decline by around 15-20 percent in 2018, primarily on the back of tight domestic coffee supplies in combination with rising domestic coffee consumption. The younger generations of Indonesians are switching to coffee, thus hundreds of independent coffee shops and roasters pop up across the country, hence boosting domestic demand for coffee.
Indonesian Coffee Production:
(in 1,000 tons)
Source: Asosiasi Eksportir dan Industri Kopi Indonesia (AEKI)