Falling Production & Growing Imports: Revitalizing the Indonesian Tea Sector
The tea industry of Indonesia has been in decline in the last decade. During this decade, the size of Indonesia's tea plantations fell from 150,000 hectares (ha) to 120,000 ha. The country's tea production and tea export slowed, while tea import grew. The lucrative business prospects of palm oil is partly responsible to have caused Indonesia's tea output to stagnate as some tea plantations have been transformed into palm oil plantations. To reverse this situation, the Indonesian government intends to revitalize the country's tea sector.
At the annual Indonesian Tea Board and National Tea Dialogue 2013 gathering (26/11), Rachmat Badruddin, Chairman of the Indonesian Tea Board, said that despite the budget for national tea development having risen from IDR 5 billion (USD $427 thousand) to IDR 48 billion (USD $4.1 million), it will take hard and efficient work in order to increase Indonesia's quality and quantity of tea. In particular, a large responsibility lies with the Indonesian tea farmers to increase production rates using the available funds. Badruddin expressed that it is important to develop integration from the upstream to downstream tea sector.
Deputy Minister of Agriculture, Rusman Heriawan, added that intersectoral collaboration is necessary for the development of the national tea industry. According to him, the Ministry of Industry also has an important role to play for removing obstacles in the tea processing industry.
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Indonesian Tea Production (in metric tonnes) |
150,623 | 153,971 | 156,904 | 150,342 | 142,400 |
Sources: Food and Agriculture Organization of the United Nations
With Indonesian tea production rates in decline and Indonesian tea consumption growing (over 20 percent annually), Southeast Asia's largest economy is in need of increasingly more tea imports to meet domestic demand. Currently, about 25 percent of the country's tea consumption is imported but this is expected to grow if the nation's tea output cannot be not raised.
Further Reading:
• Tea in Indonesia
• Commodities of Indonesia
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