The Central Java branch of the Association of Indonesian Coffee Exporters (AEKI) said that demand for luwak coffee (Indonesian: kopi luwak), an Indonesia specialty coffee and known as the world’s most expensive coffee, has been in decline since 2013. Luwak coffee is an extraordinary type of coffee as it is brewed from beans that have passed through the digestive system of the Asian palm civet cat. This labour-intensive production process and its scarcity on the global market cause luwak coffee’s expensive price.
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Today's Headlines Coffee Consumption
Being one of the world’s leading producers of coffee beans, Indonesia may benefit from climate change that causes an eastward shift in the global coffee production over the next couple of decades. According to new research conducted by Colombia-based International Center for Tropical Agriculture, the global supply of arabica beans is threatened due to a two degrees Celsius temperature increase as well as changing rain patterns. Brazil, the world’s leading coffee producer, will be affected strongly by this climate change.
The Association of Indonesian Coffee Exporters and Industries (AEKI) expects coffee bean production in Indonesia to decline by about 11 percent to 650,000-670,000 tons in 2014, from 740,000 tons in the previous year. This decline is actually less severe than initially expected as weather conditions have improved in the main coffee bean growing regions on Sumatra. Meanwhile, output in 2015 is projected at 700,000 tons. Indonesia is currently the world’s third-largest coffee bean producer, after Brazil and Vietnam.
Sentiments on the global coffee market have turned around completely in 2014 as severe drought in Brazil in combination with high rainfall in Indonesia are expected to result in weak harvests, thereby reducing global coffee production and stockpiles, causing a significant price increase since mid January 2014. Both countries are vital for global coffee production. Brazil accounts for about half of the world's total arabica production, while Indonesia is a significant robusta-type producer.
Indonesia Investments updated the profile of coffee in our commodities section. Indonesia is one of the world's top coffee producing and exporting countries and thus this beverage is an important foreign exchange earner. Starting from the 1960s, Indonesia has shown a small but stable increase in domestic production of coffee. Apart from the production of regular coffee, Indonesia is famous for certain types of specialty coffee, including luwak coffee (kopi luwak), Toraja coffee, Aceh coffee and Mandailing coffee.
Latest Columns Coffee Consumption
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).
The United States Department of Agriculture (USDA) expects Indonesia's coffee exports to fall in the 2016/2017 season due to rising domestic coffee consumption in Indonesia and low productivity. In the January-May 2016 period coffee exports from Indonesia fell 33.9 percent year-on-year (y/y) to 117,000 metric tons from 177,000 metric tons in the same period one year earlier. Indonesia's main coffee export destination markets are the USA, European Union (EU), and Japan.
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