Indonesian coffee production is expected to increase by 2.4 million bags!

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

Although Indonesian coffee crops have been affected by bad weather recently and are currently recovering, the overall yield is still not satisfactory. Indonesia's 2024Coffee crop is expected to drop by 8%. In addition, due to Indonesia's high domestic demand for coffee, the number of coffee available for export is expected to fall by 12% to 5.2 million bags, although this export volume is still 18% higher than that of 2023 Universe in 24.

In 2023, Indonesia was affected by La Nina and El Ni ñ o, resulting in a severe drought, high temperature and water shortage, resulting in a significant decline in coffee production. As a result, the market expects coffee production to return to 10.9 million bags in 2024.

By October, Indonesia's largest coffee-producing region, Sumatra, exported 532287 bags of robusta coffee, an increase of 100 per cent over the same period last year, according to a report by the Indonesian government. But total production was cut by 8 per cent to 10 million bags because of the lower-than-expected recovery of robusta coffee.

It is reported that production in the Robusta producing area in southern Sumatra is still unstable, all due to an earlier increase in acreage in the area, but production is still affected by the previous bad weather and has not fully recovered and is expected to decline by 9% to 8.6 million bags. In addition, recently, due to the high price of robusta coffee, coffee berry theft occurred in the manor in southern Sumatra, which also affected the production of the manor.

In addition, recently, near the Lindong Lintong Arabica producing area in northern Sumatra, heavy rainfall and secondary disasters such as mountain torrents and landslides caused by torrential rains have affected the harvest progress of the new harvest season in the region. However, the report points out that the impact is small, and Arabica coffee production is expected to be around 1.6 million bags.

In terms of domestic consumption, the report points out that Indonesia's purchasing power continued to be weak in 2024, with an increase of less than 1% compared with 2023, and remained at 4.8 million bags. Although Indonesia has opened up its tourism industry and its domestic economy has grown, there has been domestic deflation, which has reduced purchasing power. At the same time, the amount of coffee available for export in Indonesia 2024 in 25 was also reduced by 15% to 5.2 million bags as production fell.

It is understood that the EU has previously accounted for about 30 per cent of Indonesia's total coffee exports, but reached 664000 bags between April and September 2024, an increase of 35 per cent over the same period last year. This is mainly due to the EU's earlier non-deforestation regulations (EUDR), which led EU traders to step up their efforts to purchase multinational coffee in order to ensure adequate coffee stocks. The situation did not slow down until November, when the European Commission voted to postpone EUDR legislation for a year.

However, at present, the EU market is still worried about whether the Indonesian coffee industry can meet the EUDR requirements, and some coffee farmers certified by third-party organizations are more likely to meet the EUDR requirements, but most coffee farmers have not yet met the requirements and can only improve in the next year.

However, even though Indonesia is expected to increase by 2.4 million bags, Vietnam is in the harvest season because production in countries such as Vietnam and Brazil is still unstable, but recently it has been suffering from torrential rains, resulting in slow coffee harvest. Although Brazil has a good flowering effect, it is still not optimistic about the results, so coffee prices remain high recently.

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