Recently, the United States Department of Agriculture released a report on Indonesia's coffee industry, noting that Indonesia's total coffee production in 2024/25 is expected to increase by about 2.4 million bags (60 kg/bag) compared with the previous year.

Although Indonesia's coffee crop has been affected by severe weather for some time and is currently recovering, overall production is still below ideal, and Indonesia's 2024/25 production is expected to fall by 8%. In addition, because of strong domestic coffee demand in Indonesia, the coffee available for export is expected to decline by 12% to 5.2 million bags, though this export volume is still 18% higher than the export volume in 2023/24.

In 2023/24, Indonesia was affected by La Nina and El Nino, experiencing severe drought, high temperatures and water shortages, which caused coffee production to fall sharply. The market therefore expects coffee production to recover to 10.9 million bags in 2024/25.

By October this year, according to a report by the Indonesian government, Robusta coffee exports from Sumatra, Indonesia's largest coffee-producing region, reached 532,287 bags, up 100% compared with the same period last year. However, because the recovery of Robusta coffee was below expectations, total production was revised down by 8% to 10 million bags.

It is understood that production in the Robusta-producing areas of southern Sumatra remains unstable, because although the planted area in the region increased earlier, production is still affected by the previous severe weather and has not fully recovered, and is expected to fall by 9% to 8.6 million bags. In addition, recently, because Robusta coffee prices have been high, coffee cherry theft has occurred on estates in southern Sumatra, also affecting estate production.

In addition, recently, near the Lintong Arabica-producing area in northern Sumatra, heavy rainfall, as well as secondary disasters such as flash floods and mudslides brought by the rainstorms, have affected the harvest progress of the new crop season in the region. However, the report notes that the impact is not significant, and Arabica coffee production is expected to be around 1.6 million bags.

On the domestic consumption side, the report notes that Indonesia's purchasing power remained persistently weak in 2024/25, growing by less than 1% compared with 2023/24 and holding at 4.8 million bags. Although Indonesia opened up tourism and the domestic economy grew somewhat, domestic deflation emerged at the same time, reducing purchasing power. Meanwhile, Indonesia's available coffee export volume for 2024/25 was also revised down by 15% to 5.2 million bags as production fell.

It is understood that the EU had long accounted for around 30% of Indonesia's total coffee exports, but between April and September 2024 that reached 664,000 bags, up 35% compared with the same period last year. The main reason is the EU Deforestation Regulation (EUDR) issued earlier by the EU, which led EU traders to step up purchasing coffee from multiple countries in order to ensure sufficient coffee stocks. It was not until November, when the European Commission voted to confirm a one-year delay to the EUDR legislation, that the situation eased somewhat.

However, the EU market is currently still concerned about whether Indonesia's coffee industry can meet EUDR requirements. Some coffee farmers certified by third-party organizations are more likely to meet EUDR requirements, but most coffee farmers have not yet met the requirements and can only improve within the next year.

However, even though Indonesia is expected to increase by 2.4 million bags, as production in countries such as Vietnam and Brazil remains unstable, Vietnam is in the harvest season but has been experiencing heavy rain recently, causing the coffee harvest progress to be slow, and although Brazil's flowering has been good, the fruiting situation is still not optimistic, so coffee prices have recently remained high.

To learn more news and information about coffee origins, please scan the QR code to follow: Kaping

Long-press the QR code to follow: