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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.

 

Trouble brewing for Indonesia coffee industry

Tuesday, December 15, 2015 > 11:10:19
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(Jakarta Post)

The future looks stormy for the Indonesian coffee market, with slow production growth unable to meet a consumption hike, leaving the country – a net exporter – likely to become a net importer within the next five years.

Center for Coffee and Cacao Research director Misnawi said on Monday that domestic coffee production in Indonesia had increased at an annual 5 percent maximum in recent years, while consumption had risen at least 14 percent per year.

"The situation is the same in many countries, including Indonesia. If it continues, then we will be a coffee importer in 2020 or 2022," Misnawi said.

Globally, coffee consumption is increasing 7 to 8 percent per year, while world coffee production growth is stagnant at between 3 and 5 percent.

Brazil and the US are regarded as the leading factors in the global coffee consumption increase. Brazil has been heavily promoting the consumption of the drink, while many Americans have been swapping cola for coffee .

There were, Misnawi said, four challenges faced by coffee plantations in Indonesia. First, the development of more adaptive crops to anticipate global warming. Second, the need to more evenly spread production centers, which are currently concentrated in Sulawesi, where weather conditions reduce the quality of second-generation crops.

Third, a more sustainable technology for planting coffee. Fourth, human resources; the number of coffee planters is decreasing as a result of urbanization, necessitating a more creative approach, such as incorporating plantations into ecotourism.

This year’s coffee production stood at around 650,000 tons as of November, according to Trade Ministry data; production would, Misnawi predicted, fall about 10 percent this year, as long spells of dry weather meant that much of the industry’s output would not enter the market until next year.

Cocoa production could be less than coffee, falling about 20 percent, as cocoa farmers were not following experts’ advice, he added.


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