INDONESIAN COFFEE EXPORTS TUMBLE CLOSE TO 4-YEAR LOW
Coffee exports from Indonesia, the fourth-ranked bean shipper, fell to the lowest in nearly four years, hurt by the dent to production from dryness blamed on El Nino.
Indonesia’s coffee exports fell to 21,100 tonnes in March, the lowest since April 2012, data from the Indonesia’s Central Bureau of Statistics showed.
Indonesia – the world’s third-largest producer of robusta coffee beans, after Vietnam and Brazil – harvested around 11.4m bags in 2014, according to latest data from the country’s Ministry of Agriculture, Directorate General of Estate Crops.
The Association of Indonesian Coffee Exporters (AICE) has pegged estimates of 2015 output at 11.3m bags and expects output to decline by 8% to 10.4m bags in 2016-17.
El Nino-induced disruptions
Coffee production suffered due to a severe El Nino in 2015-16, which hit the main producing areas of southern Sumatra and Java.
Together both areas produce around three-quarters of the country’s coffee crop, consisting of the robusta variety.
Indonesian robusta exports of coffee from Sumatra have been registering double-digit declines since November 2015.
Sumatra-only coffee exports dropped to 4,637 tonnes (77,285 60 kg bags) last month, down 75% year on year.
They were 57% lower year on year in the first five months of 2016.
The US Department of Agriculture bureau based in Jakarta expects national coffee production to drop by 15% to 10m bags in the 12-month coffee year running from April 2016 to March 2017.
Robusta output is expected to fall by 1.7m bags (16%) to 8.7m bags.
The bureau noted that the drought “disrupted flowering and ripening” of the coffee crop and is the main factor leading to lower output expectations in 2016-17.
Also, “limited adoption of drought-resistant planting stock and low intensity management systems offered little protection from the extreme weather.”
The USDA bureau expects Indonesia’s overall coffee exports to decline year on year by almost 18% to 7.9m bags vs 9.62m bags last year.
The bureau noted a drop-off in the export pace since January and said that “while export pace normally picks up in June, traders expect peak export season delays due to late harvesting” as a result of drought in 2015-16.
However, some observers believe that the onset of Ramadan, the Muslim holy month which began earlier this week, could spark some kind of revival in exports, in encouraging producer sales.
Coffee farmers tend to lift sales ahead of Ramadan, to raise cash to cover expenses during the period.