2011 Coffee Semi-annual Indonesia
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
Required Report - public distribution
Date: 12/6/2011 GAIN Report Number: ID1147
Indonesia Coffee Semi-annual 2011 Approved By: Dennis Voboril Prepared By: Jonn Slette/Ibnu Edy Wiyono Report Highlights: Indonesian coffee production is predicted to decline by 20 percent to 7.5 million 60-kg bags in MY 2011/2012. Indonesian domestic coffee consumption has grown from 1.78 million bags in MY 2009/2010 to 1.9 million bags in MY 2011/2012. Indonesian coffee exports are expected to decline by 23 percent to 6.35 million bags in MY 2011/2012.
Commodities: Coffee, Green
Production: After registering an 11 percent production drop in MY 2010/2011, Post predicts that Indonesian coffee production will decline again by an estimated 20 percent to 7.5 million 60-kg bags in MY 2011/2012. This prediction reflects an adjustment over Post’s previous production estimate of 7.9 million bags. The 20 percent drop in coffee production is caused by higher-than-average levels of rainfall during the following critical stages: Blossoming period (April-September 2010) Cherry ripening period (December 2010-January 2011) The first harvest period (March-May 2011). Disturbances in coffee production have resulted in the following issues: Coffee exporters are competing with domestic coffee processors in procuring green coffee beans. One exporter in Medan reported that the supply of green coffee from farmers is down 40 percent in MY 2011/2012. Some of the exporters are importing beans from other countries, Vietnam in particular, to honor already-signed sales contracts with foreign buyers. Generally speaking, bean quality is lower than in the previous marketing year. Medium quality coffee beans normally account for 65 percent of total bean exports. Due to lower quality, the share of medium quality beans in East Java this year has decreased by 25 percent. Farm-gate Robusta coffee prices have increased from 9,000-12,000 rupiah to 22,000-24,000 rupiah. Moreover, Arabica coffee prices experienced even stronger growth, increasing from 22,000-24,000 rupiah to 50,000-60,000 rupiah. Consumption: Indonesian domestic coffee consumption has grown from 1.78 million bags in MY 2009/2010 to 1.9 million bags in MY 2011/2012. Continued consumption growth results from the following observable factors: A mushrooming of traditional coffee shops in major secondary cities such as Medan, Aceh, Lampung, Pontianak, Bangka Belitung and other area in Sulawesi, Sumatra, and Kalimantan Islands. Fast food chain restaurants such as Kentucky Fried Chicken and McDonalds have integrated coffee shops into their outlets throughout Indonesia. In addition to Starbucks and Dunkin Donuts, other international and domestic chains are opening outlets throughout the country. This includes Excelso, Coffee Bean, Bengawan Solo Coffee, J.Co, Bakoel Koffie, Coffee Club, and Oh La La Café. This reflects a wider macro-trend of a growing middle class and a greater interest in a coffee culture.
Number of large domestic coffee processors has increased from 77 establishments in 2007 to 81 establishments in 2011. Small and medium sized coffee roasters have also experienced strong growth over the same period. Instant coffee producers in Indonesia have consistently developed new products to promote higher sales. Initially, the Indonesian coffee industry just produced classic instant coffee (coffee only). These industries evolved to produce more 3-in-1 instant coffee products (instant coffee combines with sugar and non dairy creamer). Current trends are for developing lines of higher quality products that include 3-in-1 cappuccino, mocha-latte, espresso, cafe latte, vanilla latte, etc. Trade: Weather related disturbances in coffee production have resulted in reduced export growth over the last two marketing years. Indonesian coffee exports decreased by 500,000 bags to 8.25 million bags in MY 2010/2011. Exports are expected to further decline to 6.35 million bags in MY 2011/2012. Disturbances in production have slashed coffee supplies to exporters, leading to the imports from Vietnam and other coffee producing countries. Coffee import data show that Indonesia has imported 309,000 bags of coffee during the first five months of MY 2011/2012. The import volume is equal to 87 percent of total coffee imports over the entire previous marketing year. Post predicts that Indonesian coffee imports will increase to 735,000 bags in MY 2011/2012. Stocks: The decrease in production amidst positive growth of export and domestic demand resulted in significantly lower ending stocks. Indonesian coffee stocks are expected to decline from 33,000 bags in MY 2010/2011 to 18,000 bags in MY 2011/2012.
Production, Supply and Demand Data Statistics:
Coffee, Green Indonesia
2009/2010
2010/2011
2011/2012
Market Year Begin: Apr 2009 USDA Official New Post
Market Year Begin: Apr 2010 USDA Official New Post
Market Year Begin: Apr 2011 USDA Official New Post
Area Planted
1,300
1,266
0
1,268
0
1,308
Area Harvested
1,200
1,165
0
1,170
0
1,210
Bearing Trees
1,280
1,230
0
1,235
0
1,270
190
190
0
200
0
210
1,470
1,420
0
1,435
0
1,480
Non-Bearing Trees Total Tree Population Beginning Stocks
108
108
533
503
33
33
Arabica Production
1,500
1,500
1,375
1,375
1,230
1,170
Robusta Production
9,000
9,000
7,950
7,950
6,655
6,330
Other Production Total Production Bean Imports Roast & Ground Imports Soluble Imports
0
0
0
0
0
10,500
10,500
9,325
9,325
7,885
7,500
425
425
150
285
200
600
0
0
0
10
0
135
0
0
0
0
0
0
425
425
150
295
200
735
Total Supply
11,033
11,033
10,008
10,123
8,118
8,268
Bean Exports
7,425
7,425
7,050
7,050
5,150
5,150
Total Imports
Rst-Grnd Exp.
0
0
0
0
0
0
Soluble Exports
1,325
1,325
1,200
1,200
1,200
1,200
Total Exports
8,750
8,750
8,250
8,250
6,350
6,350
Rst,Ground Dom. Consum
1,600
1,625
1,575
1,680
1,600
1,720
Soluble Dom. Cons. Domestic Use Ending Stocks Total Distribution
150
155
150
160
150
180
1,750
1,780
1,725
1,840
1,750
1,900
533
503
33
33
18
18
11,033
11,033
10,008
10,123
8,118
8,268
1000 HA, MILLION TREES, 1000 60 KG BAGS
Required Report - public distribution
Date: 12/6/2011 GAIN Report Number: ID1147
Indonesia Coffee Semi-annual 2011 Approved By: Dennis Voboril Prepared By: Jonn Slette/Ibnu Edy Wiyono Report Highlights: Indonesian coffee production is predicted to decline by 20 percent to 7.5 million 60-kg bags in MY 2011/2012. Indonesian domestic coffee consumption has grown from 1.78 million bags in MY 2009/2010 to 1.9 million bags in MY 2011/2012. Indonesian coffee exports are expected to decline by 23 percent to 6.35 million bags in MY 2011/2012.
Commodities: Coffee, Green
Production: After registering an 11 percent production drop in MY 2010/2011, Post predicts that Indonesian coffee production will decline again by an estimated 20 percent to 7.5 million 60-kg bags in MY 2011/2012. This prediction reflects an adjustment over Post’s previous production estimate of 7.9 million bags. The 20 percent drop in coffee production is caused by higher-than-average levels of rainfall during the following critical stages: Blossoming period (April-September 2010) Cherry ripening period (December 2010-January 2011) The first harvest period (March-May 2011). Disturbances in coffee production have resulted in the following issues: Coffee exporters are competing with domestic coffee processors in procuring green coffee beans. One exporter in Medan reported that the supply of green coffee from farmers is down 40 percent in MY 2011/2012. Some of the exporters are importing beans from other countries, Vietnam in particular, to honor already-signed sales contracts with foreign buyers. Generally speaking, bean quality is lower than in the previous marketing year. Medium quality coffee beans normally account for 65 percent of total bean exports. Due to lower quality, the share of medium quality beans in East Java this year has decreased by 25 percent. Farm-gate Robusta coffee prices have increased from 9,000-12,000 rupiah to 22,000-24,000 rupiah. Moreover, Arabica coffee prices experienced even stronger growth, increasing from 22,000-24,000 rupiah to 50,000-60,000 rupiah. Consumption: Indonesian domestic coffee consumption has grown from 1.78 million bags in MY 2009/2010 to 1.9 million bags in MY 2011/2012. Continued consumption growth results from the following observable factors: A mushrooming of traditional coffee shops in major secondary cities such as Medan, Aceh, Lampung, Pontianak, Bangka Belitung and other area in Sulawesi, Sumatra, and Kalimantan Islands. Fast food chain restaurants such as Kentucky Fried Chicken and McDonalds have integrated coffee shops into their outlets throughout Indonesia. In addition to Starbucks and Dunkin Donuts, other international and domestic chains are opening outlets throughout the country. This includes Excelso, Coffee Bean, Bengawan Solo Coffee, J.Co, Bakoel Koffie, Coffee Club, and Oh La La Café. This reflects a wider macro-trend of a growing middle class and a greater interest in a coffee culture.
Number of large domestic coffee processors has increased from 77 establishments in 2007 to 81 establishments in 2011. Small and medium sized coffee roasters have also experienced strong growth over the same period. Instant coffee producers in Indonesia have consistently developed new products to promote higher sales. Initially, the Indonesian coffee industry just produced classic instant coffee (coffee only). These industries evolved to produce more 3-in-1 instant coffee products (instant coffee combines with sugar and non dairy creamer). Current trends are for developing lines of higher quality products that include 3-in-1 cappuccino, mocha-latte, espresso, cafe latte, vanilla latte, etc. Trade: Weather related disturbances in coffee production have resulted in reduced export growth over the last two marketing years. Indonesian coffee exports decreased by 500,000 bags to 8.25 million bags in MY 2010/2011. Exports are expected to further decline to 6.35 million bags in MY 2011/2012. Disturbances in production have slashed coffee supplies to exporters, leading to the imports from Vietnam and other coffee producing countries. Coffee import data show that Indonesia has imported 309,000 bags of coffee during the first five months of MY 2011/2012. The import volume is equal to 87 percent of total coffee imports over the entire previous marketing year. Post predicts that Indonesian coffee imports will increase to 735,000 bags in MY 2011/2012. Stocks: The decrease in production amidst positive growth of export and domestic demand resulted in significantly lower ending stocks. Indonesian coffee stocks are expected to decline from 33,000 bags in MY 2010/2011 to 18,000 bags in MY 2011/2012.
Production, Supply and Demand Data Statistics:
Coffee, Green Indonesia
2009/2010
2010/2011
2011/2012
Market Year Begin: Apr 2009 USDA Official New Post
Market Year Begin: Apr 2010 USDA Official New Post
Market Year Begin: Apr 2011 USDA Official New Post
Area Planted
1,300
1,266
0
1,268
0
1,308
Area Harvested
1,200
1,165
0
1,170
0
1,210
Bearing Trees
1,280
1,230
0
1,235
0
1,270
190
190
0
200
0
210
1,470
1,420
0
1,435
0
1,480
Non-Bearing Trees Total Tree Population Beginning Stocks
108
108
533
503
33
33
Arabica Production
1,500
1,500
1,375
1,375
1,230
1,170
Robusta Production
9,000
9,000
7,950
7,950
6,655
6,330
Other Production Total Production Bean Imports Roast & Ground Imports Soluble Imports
0
0
0
0
0
10,500
10,500
9,325
9,325
7,885
7,500
425
425
150
285
200
600
0
0
0
10
0
135
0
0
0
0
0
0
425
425
150
295
200
735
Total Supply
11,033
11,033
10,008
10,123
8,118
8,268
Bean Exports
7,425
7,425
7,050
7,050
5,150
5,150
Total Imports
Rst-Grnd Exp.
0
0
0
0
0
0
Soluble Exports
1,325
1,325
1,200
1,200
1,200
1,200
Total Exports
8,750
8,750
8,250
8,250
6,350
6,350
Rst,Ground Dom. Consum
1,600
1,625
1,575
1,680
1,600
1,720
Soluble Dom. Cons. Domestic Use Ending Stocks Total Distribution
150
155
150
160
150
180
1,750
1,780
1,725
1,840
1,750
1,900
533
503
33
33
18
18
11,033
11,033
10,008
10,123
8,118
8,268
1000 HA, MILLION TREES, 1000 60 KG BAGS
