14 June 2022 (closed)
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Indonesia’s coffee production may hit a record high in the 2015-2016 harvest season according to a Bloomberg survey. The survey suggests that Indonesian coffee output is to rise 18 percent (y/y) to 650,000 metric tons from 550,000 tons in the previous season. Reason for a good coffee harvest is favorable weather (rain) having boosted yields. Indonesia is the world’s third-largest producer and exporter of robusta. Also in other parts of the world coffee production is estimated to increase, hence potentially placing pressure on prices.
The global coffee supply is expected to increase this year amid forecasts of good harvests in Indonesia, Vietnam (the world’s largest robusta producer), and Brazil (the world’s second-largest robusta producer and top arabica producer). In 2015-2016 the global harvest is forecast to grow 7 percent to 152.8 million (60-kilogram) bags.
The robusta price fell 12 percent over the past year to USD $1,838 per ton on the ICE Futures Europe on 23 March 2015. The price for arabica was down 20 percent over the past 12 months to USD $1.4185 per pound in New York. Coffee has been the most-volatile agricultural commodity during the past year amid weather changes in Brazil. After soaring up to 11 percent in mid-January 2015, plenty of rainfall in Brazil improved crop prospects and prices subsequently fell to a 13-month low. Severe drought in Brazil had damaged coffee crops in early 2014.
Rabobank International said that the weather pattern has improved (although still far from perfect) and therefore the 2015-2016 harvest will improve. However, Moenardji Soedargo, Chief Operating Officer at coffee exporter Aneka Coffee Industry, said that heavy rains have in fact damaged some trees, knocking off small coffee cherries, particularly in southern Sumatra. Hence he expects coffee production to be slightly below Bloomberg’s forecast. Over the next week, heavy rain is expected to continue in Sumatra and Java, and moving towards Sulawesi.