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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Indonesia needs to boost coffee production

Friday, October 02, 2015 > 09:39:18
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(Jakarta Post)

The government needs to provide more land and expand coffee plantations in order to be able to achieve its target of surpassing Brazil as the world’s largest coffee supplier, the Union of Indonesian Coffee Exporters’ Associations (GAEKI) has said.

GAEKI secretary-general Isdarmawan Asrikan said recently that the government needed to provide more land to grow coffee and intensify production if it wanted to beat Brazil, which produces around 2.7 million tons of coffee beans and exports over 1.8 million tons a year.

“I think we can achieve that in five to 10 years as long as the government does what it needs to do,” he told The Jakarta Post.

The Trade Ministry’s director general for national export development, Nus Nuzulia Ishak, said the government aimed to make the country the largest coffee supplier in the world, particularly its well-known specialty coffees.

“Indonesia must become the world’s first-ranked coffee supplier,” she said in a statement.

Indonesia, which produces between 650,000 to 750,000 tons of coffee beans a year, is currently the fourth-largest coffee producer after Brazil, Vietnam and Colombia, according to data from the US Department of Agriculture.

It is, meanwhile, the fifth-largest supplier after Germany, which exports processed coffee beans that are sourced from many developing countries.

Isdarmawan argued that Indonesia had to produce at least 700 kilograms of coffee beans per hectare of coffee plantation and process more coffee beans if it wanted to achieve its goal of out-producing Brazil.

Indonesia currently has around 1.1 million hectares of coffee plantations, with production volume rising from around 400,000 tons a year in the 1990s to level out at around 650,000 tons since 2002, according to data from GAEKI and the Agriculture Ministry.

Brazil’s coffee production currently stands at around 2.7 million tons each year.

“The government needs to both add more coffee plantations and boost the production of current plantations,” Isdarmawan said.

Of the total coffee plantation area, 96 percent is cultivated by small farmers and the remainder is run by private and state-owned companies, with only around 77 percent of the land deemed productive, GAEKI’s data has revealed.

In addition, the government had to quickly remove infrastructure bottlenecks and abolish the 10 percent value-added tax on agricultural commodities to reduce logistics costs and make Indonesia’s coffee prices more competitive, Isdarmawan argued.

Coffee producers also need to produce more Arabica coffee than the robusta type to boost the export value, he went on, adding that Arabica fetched better prices in the market.Indonesia exports around 450,000 tons of coffee per year, with 85 percent being robusta and only 15 percent Arabica.Italy, which is the world’s largest coffee consumer, has become the main export destination for Indonesian coffee growers.

Indonesia’s coffee exports to Italy have surged by 10.14 percent in the last five years, according to Trade Ministry data.To tap deeper into the Italian market, the Trade Ministry is set to hold the Indonesia Coffee Week from Sept. 28 to Oct. 2 as part of the World Expo Milano in Milan, Italy.The ministry will partner with the GAEKI in introducing a number of Indonesian coffee specialties to visitors.


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