Earlier, the United States Department of Agriculture released its report on the state of Indonesia's coffee industry, noting that weather conditions in Indonesia have improved, so Indonesia's coffee production in 2024/25 is expected to recover to 10.9 million bags (69 kg per bag).Of this, arabica coffee production is expected to be 1.4 million bags, consistent with previous years, while robusta coffee production is expected to be 9.5 million bags, higher than the 6.3 million bags in 2023/24.

But the market is not optimistic, because since the start of this year, Indonesia has been hit by a series of natural disasters such as floods, landslides and volcanic eruptions, and the industry is not optimistic about this year's coffee production.

Just yesterday, Mount Merapi in central Java, Indonesia, erupted at dawn, with lava spewing onto the slopes. As a result, many coffee estates nearby may be affected, leading to reduced output, though most coffee is grown in the eastern part of the island, with less production in the central region, so the impact on overall production is relatively small.

Recently, according to a commodity export report released by the Indonesian government, arabica export volumes have been relatively stable. However, in May the country's Sumatra exported a total of 122,544 bags of robusta coffee (60 kg per bag), a decrease of 54% compared with the same period last year. In addition, in the first two months of the 2024/25 year (April and May), cumulative robusta coffee exports were 179,599 bags, a decrease of 51.34% compared with the same period last year.

However, although the report says the weather has improved, Indonesia has been affected by El Nino since 2023. Even though the report states that El Nino ended around April, the subsequent neutral phase still affects Indonesia. And farmers are worried about the impact of the subsequent La Nina phenomenon.

It is reported that, due to the impact of El Nino, drought in 2023 affected the flowering of coffee trees, reducing yields. In addition, it caused the rainy season on the Indonesian island of Sumatra to be delayed by nearly 1 month. The large-scale harvest that originally began in April was obstructed by heavy rain and was postponed until May, resulting in reduced export volumes in the first few months.

In addition, recently Indonesia's national economy has grown steadily, with improved performance in industries such as food, beverages and tourism, but this growth increased Indonesia's domestic coffee consumption by 10,000 bags. In the 2024/25 year, Indonesia's coffee consumption will reach 4.8 million bags, reducing the volume of coffee available for export.

In addition, Robusta prices are currently high, mainly because Vietnam has suffered severe drought, which has reduced coffee production. Brazil has also recently reported lower-than-expected coffee output, with total production potentially falling by 8%-14%. This has also led buyers to choose Indonesian Robusta, but reports indicate that Indonesian coffee exporters are delaying coffee sales and exports, as exporters believe that global supply is currently tight and coffee prices could rise further, so they want to wait until prices are higher to sell their coffee beans.