Indonesian Coffee Industry Export and production of Indonesian Coffee beans Robusta makes instant coffee

Indonesia is the world's third largest coffee producer and exporter after Brazil and Vietnam. Indonesian companies offer a full range of quality coffee, from the ordinary Robusta variety to the outstanding Arabica coffee and the famous kopi luwak Indonesian Kopi Luwak. Over the past few decades, national coffee production has increased, although not linearly, as the harvest fluctuates widely from year to year, depending on the weather. With the increase in per capita coffee consumption in Indonesia and the wider region, there is room for further growth, but there is also a significant investment demand. The capital needed to take Indonesia's coffee industry to a new level offers attractive prospects for investors, while the country's booming coffee culture offers opportunities for foreign exporters.

The tropical climate of Indonesia creates almost ideal conditions for growing coffee. Cultivation dates back to colonial times and began in western Java, but the plantation quickly expanded to eastern Java and all parts of the country. Today, most Indonesian coffee comes from Sumatra, but Sulawesi and Kalimantan, the Little Sunda Islands, Sumbawa and Flores in Bali, and the easternmost region of Papua all contribute to national production. Robusta coffee accounts for more than 3/4 of Indonesian products; the rest is the milder type of Arabica coffee. Many coffee growing areas in the country produce coffee beans with unique flavor and characteristics, and some plateau Arabica coffee from Indonesia is recognized by coffee lovers all over the world. In fact, there are many different varieties of Mandarin coffee in Indonesia, such as Golden Manning, Lin Dong Manning, Tiger Manning and so on.

Export-oriented industry

Coffee has been the first export commodity since the Dutch East India Company shipped goods from Batavia (Jakarta) to Europe in the early 18th century. Indonesian growers compete with exporters in tropical Africa and Latin America for global market share, making the company vulnerable to world price and currency fluctuations. Most of Indonesian coffee is shipped abroad, especially in bumper years when production far exceeds domestic demand.

According to data compiled by the International Coffee Organization, Indonesian coffee exports increased from 336840 tons (or 5614000 bags of 60 kg bags) in 2000 / 2001 to 656400 tons (10940000 bags) in 2012 / 2013. During the same period, the total output increased from 419220 tons to 763800 tons. At present, the main destinations for Indonesian coffee are the United States, Japan and Western Europe (especially Germany), but Indonesia is able to take advantage of the fast-growing demand in the ASEAN region and China.

Growing domestic demand

Instant coffee is very popular in Indonesia, and new three-in-one brands enter the market frequently. Instant coffee is also sold in thousands of low-end cafes and corner shops, while higher-income consumers have a preference for coffee shops. As a result, foreign and local franchises are spreading across the country. Starbucks alone has announced plans to open about 100 new stores in the country within three years. With increased awareness of health and nutrition, the market sees great potential for coffee products that provide additional health benefits, such as coffee with ginseng or low-sour coffee that is milder to the stomach. Indonesians are also becoming more cautious about their generally high sugar intake.

Farmers must improve their level.

However, it is recommended that manufacturers retain this inherited production method to strengthen their marketing.

Investment prospect

To strengthen the current growth momentum, Indonesian coffee growers need to revitalize aging plantations with new trees. Processing companies must upgrade their facilities, and exporters must strengthen their marketing and packaging. The substantial capital investment required for these measures has opened up opportunities for global coffee producers and support companies to enter the market.