Indonesia's 2010 Coffee Output Likely Down 5%-10%

By Helen Sun
The Wall Street Journal

MAY 17, 2010

Indonesia is likely to produce 5%-10% less coffee in 2010 as excessive rainfall at the beginning of the year affected the crop, officials at the Association of Indonesia Coffee Exporters said Monday.

The lower output, coupled with steady growth in domestic consumption, is likely to cut exports from Asia's second-largest robusta coffee producer.

Output may fall to around 400,000-450,000 metric tons this year compared with normal production of 500,000 tons a year.

"The heavy rains at the end of last year and the beginning of this year were not good for flowering; it affected the productivity," said Rachim Kartabrata, the association's executive secretary.

"The (robusta) bean quality was also affected," association chairman Hassan Widjaja said.

Indonesia began harvesting its main coffee crop harvest in April and is expected to finish a month from now.

The officials said the forecasts were based on the ongoing robusta harvest situation in Lampung, the country's main production region which accounts for most of the country's exports. Indonesia exports around 85% of its total output.

Arabica output should be steady, said Kartabrata.

Meanwhile, industry participants said the country's domestic consumption had been growing at a fast pace in recent years, which may put further pressure on exports this year.

"It (the fast growth in local demand) is also quite surprising to us," said Kartabrata, adding some industry participants estimate the growth rate hit as much as 50% per annum.

Indonesia's coffee production in the 2009-10 crop year ending March 31 totaled 11.5 million 60-kilogram bags, up from 9.35 million bags in 2008-09, according to the International Coffee Organization.

-By Helen Sun, Dow Jones Newswires; (65) 6415-4086; helen.sun@dowjones.com