Bad weather may further slash coffee production

January 10, 2011

Indonesia’s coffee exporters estimate that coffee production would decrease by 8.3 percent to about 550,000 tons this year, down from about 600,000 tons in 2010, due to unfavorable weather conditions.

Indonesian Coffee Exporters Association (AEKI) secretary-general Rachim Kartabrata said Sunday that this year’s production would decline because of extreme weather and excessive rainfall.

“Extreme weather and extensive rainfall would make coffee beans fall or decay,” he said, adding that another threat to overall harvests came from coffee bean poachers.

Agriculture Ministry data differed from the AEKI appraisal, and recorded that Indonesia’s coffee production reached 479,000 tons in 2010, far lower than earlier 698,000-ton target.

The US Department of Agriculture foreign agricultural service has estimated that Indonesia’s coffee production would fall to eight million sacks (480,000 tons) in the harvest year ending in March this year. The agency also estimated the country’s coffee exports would fall by about 17 percent.

AEKI estimates that this year Indonesia, currently the world’s fourth largest coffee producer after Brazil, Vietnam and Colombia, would export 300,000 tons of coffee while retaining about 180,000 tons for domestic demand and stocks.

Indonesia exported 350,000 tons of coffee beans last year contributing US$795.5 million to export revenues. The export volume was lower than 401,000 tons exported in 2009, but in value terms was higher than the $772 million recorded that year.

Last year’s exports comprised 280,000 tons of Robusta coffee beans (with a value of $504.4 million), 56,000 tons of Arabica beans ($224.1 million) and 14,000 tons of mixed beans ($61 million).

Rachim said that although the volume of coffee exports may decline, the export value could be higher because coffee prices would possibly increase this year amidst tighter global supply.

The International Coffee Organization predicted that global coffee output in 2011 would slide from between 133 million and 135 million sacks — each weighing 60 kilograms — due to a smaller harvest in Brazil, the world’s largest coffee producer.

Meanwhile, Bloomberg reported last week that arabica-coffee futures for March delivery fell 2.3 cents, or 1 percent, to $2.307 a pound in New York. In London, robusta-coffee futures for March delivery declined $6, or 0.3 percent, to $2,023 a ton.

Cocoa futures for March delivery climbed $20, or 0.7 percent, to $2,850 a ton in New York. In London, cocoa futures for March delivery rose 4 pounds, or 0.2 percent to £1,928 ($3,002) a ton in London. (lnd)

The Jakarta Post, Jakarta | Mon, 01/10/2011 11:01 AM | Business