Indonesian coffee exports set to decline to two-year low--with shipments totaling 450,000 tonnes in the 12 months starting April 1--as increasing domestic consumption erodes supplies from record harvest, estimates show

JAKARTA, Indonesia , February 28, 2013 () – Coffee exports from Indonesia, the third-largest grower of robusta beans used in instant drinks, are set to decline to a two-year low as increasing domestic consumption erodes supplies from a record harvest.

Shipments will total 450,000 metric tons in the 12 months starting April 1, the median of seven exporters’ estimates compiled by Bloomberg shows. That’s 7.4 percent less than sales of 486,000 tons this year, according to U.S. Department of Agriculture data. The harvest will be 640,000 tons in the coming season, the survey shows, 10 percent more than a year earlier.
Local usage almost doubled in the past decade to 149,400 tons, according to the USDA.

Reduced supplies from Indonesia may extend robusta’s 23 percent advance from a 14-month low in January 2012 as roasters switch from the more expensive arabica variety. Global usage of robusta climbed 11 percent in the 12 months to September as consumption of arabica fell 6.2 percent, Macquarie Group Ltd. said in a report last month. The coffee market may swing to a deficit in the 12 months starting Oct. 1, according to Hackett Financial Advisors Inc.

“Coffee shops are flourishing in all segments, from low-to high-end markets,” said Pranoto Soenarto, head of specialty coffee at the Association of Indonesian Coffee Exporters and Industry, referring to consumption. “We may see prices gain as Indonesia reduces supplies.”


Robusta for May delivery climbed 0.5 percent to $2,108 a ton on NYSE Liffe in London at 5:10 p.m. Singapore time. Arabica for May delivery advanced 0.6 percent to $1.4425 a pound on ICE Futures U.S. in New York. The arabica premium over robusta was at 48.63 cents a pound, down 14 percent this year after a 61 percent drop in 2012.

Coffee is the best bet in the soft commodities segment, Shawn Hackett, president of the Boynton Beach, Florida-based company, said Feb. 24. The deficit may be 2 million bags of 60 kilograms (132 pounds) each from an estimated surplus of 9 million bags this season as production drops in Brazil and Vietnam, Hackett said Feb. 5.

The market may see a shortage of 600,000 bags in 2013-2014, according to Volcafe, a unit of ED&F Man Holdings Ltd. Supplies will be 5.4 million bags bigger than demand in 2012-2013, mainly due to excess supplies from Brazil, the Winterthur, Switzerland- based trader said in a quarterly e-mailed Feb. 26.

Brazil is the top producer of arabica beans, brewed by specialty companies including Starbucks Corp., and Vietnam is the biggest grower of robusta used by Nestle SA for instant drinks. Robusta beans account for about 80 percent of Indonesia’s harvest, according to the association.


Most of Sumatra island, which includes Indonesia’s main growing regions, may have normal rainfall in March and April, according to weather models on the Meteorological, Climatology and Geophysics Agency’s website. The outlook eased concern that earlier heavy rains may cut production in southern Sumatra.

“It’s raining almost every day, but I don’t see it as a big threat as trees are already producing cherries,” Sumita, head of the Lampung chapter of the association, said last week.

Supplies have started coming from newly matured plants in northern Sumatra, adding to the rising output, according to Saidul Alam, an official of the North Sumatra chapter.

Robusta is harvested mainly in Asia and parts of Africa, while arabica is grown in Latin America. Indonesia’s harvest runs from April to July, with a smaller crop through September.

--Editor: Ovais Subhani

To contact the reporters on this story: Yoga Rusmana in Jakarta at; Eko Listiyorini in Jakarta at

To contact the editor responsible for this story: James Poole at

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