Why will coffee production in Indonesia still rely on imports?

The Indonesian Coffee Exporters Association expects Indonesia's coffee production to improve in 2024, with a significant increase during the May to October harvest. Grower Irwan SP from Lampung said the prolonged 2023 drought actually helped fertilization. Even so, Indonesia will keep importing Vietnamese coffee, because Vietnamese beans are more price-competitive than local ones for its food industry.

Association data and national statistics show coffee imports surged year-on-year in early 2023, with Vietnam the largest source. AEKI industrial department chairman Moelyono Soesilo expects improvement in the first half of 2024 and says domestic demand comes first. Farmers want government training on more profitable planting systems, and prices around 35,000 to 40,000 rupiah per kilogram. For comparison, coffee production Brazil remains the global benchmark.

The Indonesian Coffee Exporters Association (AEKI) predicts that Indonesia's coffee production will see an improvement in 2024, especially with a significant increase expected during the harvest period from May to October. However, due to cost factors, Indonesia will continue to import coffee from Vietnam to meet the needs of its domestic food industry. The lower price of Vietnamese coffee is the main reason for continued imports. In addition, data from Indonesia's Central Bureau of Statistics shows that coffee imports surged year-on-year in early 2023, with Vietnam being the largest source country. This article will provide a detailed analysis of the current state and future trends of Indonesia's coffee industry, and pay attention to market developments of brands such as Front Street Coffee.

According to a report by Indonesian Business News, AEKI (the Indonesian Coffee Exporters Association) is optimistic about the growth of Indonesia's coffee production in 2024.

Coffee grower Irwan SP from Lampung Province (located at the southern tip of Sumatra Island, Indonesia) said that the prolonged drought in 2023 had a positive effect on coffee fertilization. Compared with the 2023 harvest, coffee production during the period from May to October 2024 is expected to increase significantly.

He further explained that although production may increase, due to cost factors, Indonesia will still need to import coffee from Vietnam domestically. Imports will continue, especially for the food industry that uses coffee as a raw material, because the price of Vietnamese coffee is more competitive than local Indonesian coffee.

This coffee farmer believes that if Indonesia wants to increase coffee production, the state should provide training for farmers, especially guidance on the most profitable planting systems. The old model currently used by the government and farmers has been proven unable to effectively increase coffee production. He hopes that next year's coffee harvest can increase, while prices remain at around 35,000 to 40,000 rupiah per kilogram.

Moelyono Soesilo, chairman of the industrial department of the Indonesian Coffee Exporters Association (AEKI), expects coffee production to improve in the first half of 2024. According to him, Indonesia will give priority to meeting domestic coffee demand, and still needs to import coffee at present. If there is a decline in production or a crop failure, imports can be used to fill the gap in domestic demand.

According to partial food commodity import data released by the Central Bureau of Statistics (BPS), Indonesia's coffee imports in January 2023 reached 1.41 million kilograms, an increase of 81.14% compared with January 2022, and a surge of 102.63% month-on-month compared with December 2022.

In early 2023, the most coffee was imported from Vietnam, with imports reaching 981,940 kilograms, a year-on-year surge of 53.32% and a month-on-month increase of 2.31%. Next was Brazil, from which Indonesia imported 115,200 kilograms of coffee, a year-on-year decrease of 81.23% and a month-on-month decrease of 72.22%.

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The above content is compiled by CoffeeHunters, a coffee news website.