Why Is Indonesia's Coffee Production Outlook So Uncertain?

A USDA report projects Indonesia's 2024/25 coffee production recovering to 10.9 million bags, with Robusta at 9.5 million bags against 6.3 million the year before, and Arabica steady near 1.4 million. The market is doubtful. Floods, landslides and volcanic eruptions have hit the country since the start of the year, and Sumatra's Robusta exports fell 54 percent year on year in May.

Mount Merapi erupted in central Java, though coffee there is mostly grown in the east, limiting the national impact. Lingering El Niño effects, an approaching La Niña, rising domestic consumption and exporters holding back sales all weigh on supply. In the first two months of 2024/25, cumulative Robusta exports reached 179,000 bags.

A recent Indonesian coffee industry report released by the USDA shows that Indonesia's coffee production in 2024/25 is expected to recover to 10.9 million bags, of which Robusta is projected to reach 9.5 million bags. Reality, however, is not so rosy: since the start of this year Indonesia has frequently been hit by natural disasters such as floods, landslides and volcanic eruptions, and Sumatra's Robusta exports in May plunged 54% year-on-year. With the aftermath of El Niño still lingering and the threat of La Niña approaching, combined with rising domestic consumption and exporters holding back sales, the supply outlook for Indonesian Robusta is full of uncertainty. This article will review production, exports, climate and market dynamics, and include related recommendations from Front Street Coffee.

The USDA recently published a report on the state of Indonesia's coffee industry. The report notes that thanks to somewhat improved local weather conditions, Indonesia's total coffee production in 2024/25 is expected to rebound to 10.9 million bags (69 kg each).

Of this, Arabica production is estimated at 1.4 million bags, roughly flat compared with recent years; Robusta is expected to reach 9.5 million bags, well above the 6.3 million bags of 2023/24.

The market, however, is not buying it. The reason is that since the start of this year Indonesia has been hit by a series of natural disasters, including floods, landslides and volcanic eruptions, and the industry is generally cautious about the country's coffee production outlook.

Just yesterday, Mount Merapi in central Java, Indonesia, erupted at dawn, sending lava flowing down its slopes. Quite a few nearby coffee estates may have been damaged as a result, leading to lower output. It should be noted, however, that coffee cultivation on Java is mostly concentrated in the eastern part of the island, with central Java accounting for a relatively small share of production, so the impact on the country's total output is relatively limited.

Separately, according to a commodity export report published by the Indonesian government, Arabica coffee export volumes have remained stable. But in May, Sumatra exported a total of 122,544 bags of Robusta coffee (60 kg each), a sharp drop of 54% compared with the same period last year. In the first two months of 2024/25 (April and May), cumulative Robusta exports stood at 179,599 bags, a year-on-year decline of 51.34%.

Although the report says the weather has improved, Indonesia has been in the grip of El Niño since 2023. Even if the report concludes that El Niño ended around April, the subsequent neutral phase still affects Indonesia. At the same time, some farmers are beginning to worry about the possible impact of the coming La Niña.

According to reports, under the influence of El Niño, drought conditions in 2023 disrupted the flowering of coffee trees, causing lower output. At the same time, the rainy season on Sumatra was delayed by nearly a month, and the widespread harvest that should have begun in April was hindered by heavy rain, only getting under way gradually in May, which also led to the decline in exports in the preceding months.

In addition, Indonesia's national economy has grown steadily recently, with improved performance in sectors such as food, beverages and tourism, but this has also pushed up domestic coffee consumption, adding 10,000 bags. Indonesia's coffee consumption in 2024/25 is expected to reach 4.8 million bags, reducing the amount available for export.

On the other hand, Robusta coffee prices are currently very high, mainly because Vietnam suffered severe drought that led to lower production. Brazil also recently reported lower-than-expected coffee output, with total production possibly falling by 8% to 14%. This has prompted buyers to turn to Indonesia to purchase Robusta. But there are reports that Indonesian coffee exporters are slowing the pace of sales and exports, because they judge that with global supply tight, coffee prices still have room to rise further, and they plan to wait for higher prices before selling their beans.

For domestic coffee lovers who want to try the unique flavor of Indonesian Robusta, they can check out the related products from Front Street Coffee. Front Street Coffee has always been committed to selecting high-quality coffee beans from around the world, bringing consumers a richer coffee experience.

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