El Nino continues to haunt troubled RI coffee growers<\/p>\n
By Sylvia Gratia MN<\/p>\n
JAKARTA (JP): A blistering drought, believed to have been
\ntriggered by an El Nino weather pattern continues to haunt
\nIndonesia's coffee growers.<\/p>\n
Indonesia's coffee crop for the 1997\/1998 coffee year, from
\nOct. 1, 1997, to Sept. 30, 1998, was partially destroyed,
\nallowing the country to produce only 410,000 metric tons, 40,000
\ntons below its normal annual output of 450,000 tons.<\/p>\n
The effect of this weather phenomenon will likely continue to
\naffect Indonesia's coffee crop in the 1998\/1999 coffee year.<\/p>\n
Association of Indonesian Coffee Exporters' (AICE) Executive
\nSecretary M. Noer Madjid told The Jakarta Post that the country's
\ncoffee output would continue to decline slightly in 1998\/1999
\nbecause of the continuing effect of El Nino, exacerbated by its
\nsister La Nina, a reverse weather pattern which brings higher-
\nthan-normal rainfalls.<\/p>\n
\"In 1997, we were assaulted by El Nino, and right now we are
\nhit by La Nia, albeit its effect will not as drastic as El
\nNino's,\" Noer said.<\/p>\n
Heavy rains, which have fallen since September, have affected
\ncoffee crops in South Sumatra, Lampung and Bengkulu, which
\ntogether account for 65 percent of the country's production.<\/p>\n
El Nino, named by Peruvian fishermen after the Christ child,
\ndescribes the unusually warm Pacific Ocean temperatures which
\noccur every two years to seven years unleashing natural disasters
\naround the world, damaging crops for two successive years and
\ncausing turmoil in the world commodities market.<\/p>\n
During El Nino's cycle last year, Indonesia experienced its
\nmost severe drought in 50 years. Forest fires burned uncontrolled
\nin Sumatra and Kalimantan, and the country's agricultural and
\ncrop production was seriously affected.<\/p>\n
Its sister, La Nina (little sister), arises from unusually
\ncool temperatures in the Pacific Ocean and often follows the
\ndrought-inducing El Nino weather pattern. Its arrival brings the
\nthreat of floods, violent tropical storms and landslides.<\/p>\n
AICE secretary for research and development Miftakhul Kirom
\nsaid that the prolonged drought, since September last year, has
\ndestroyed coffee flowers in Indonesia's coffee belt and caused a
\nlower output in 1997\/1998 and will again cause lower output in
\n1998\/1999.<\/p>\n
This year's decline will be due to the excessive rains and
\nstrong winds, since September, which will hit coffee flowers,
\nmostly in the area south of the equator, he said.<\/p>\n
Indonesia is the world's third-largest coffee producer after
\nBrazil and Colombia, with an output of 420,000 tons in 1997\/1998.
\nThe country's production is 90 percent robusta and 10 percent
\narabica.<\/p>\n
Robusta, extensively used in the instant coffee industry, is
\nmore bitter in taste than the higher grade arabica, which is
\npredominantly grown in Central America, South America, East
\nAfrica and India.<\/p>\n
Indonesia's main robusta-producing areas are South Sumatra,
\nLampung and Bengkulu. The three Sumatran provinces -- which
\ntraders call Indonesia's coffee triangle -- produce up to 70
\npercent of Indonesia's total production of coffee.<\/p>\n
The country's arabica is produced in Aceh; North Tapanuli,
\nNorth Sumatra; Toraja, South Sulawesi; and by state-owned coffee
\nplantations in East Java and Central Java.<\/p>\n
Noer said 1999\/2000 coffee production will be bright due to
\nthe wet weather conditions.<\/p>\n
\"La Nina may have a bad effect on this year's (1998\/1999)
\ncoffee harvest but the wet conditions it will cause next year
\nwill bring comfortable weather for the 1999\/2000 coffee harvest
\nas it will help coffee flowers to bloom,\" he said.<\/p>\n
Exports<\/p>\n
As coffee production continues to plunge, so does its exports,
\nNoer said.<\/p>\n
He said that the decline in production has led to a 15 percent
\ndecline in export volumes to around 330,000 tons this coffee
\nyear, or about 7 percent of the world's demand, from 381,512 tons
\nrecorded in 1996\/1997.<\/p>\n
\"As of the beginning of September, 1998, Indonesia's coffee
\nexports only reach 321,024 tons. So, we expect that the figure
\nwill reach 330,000 by the end of the 1997\/1998 coffee year,\" Noer
\nsaid.<\/p>\n
Following an acute depreciation of the rupiah against the U.S.
\ndollar, coffee producers prefer exporting their products. But the
\nexpected windfall was hampered by lower domestic production.<\/p>\n
Kirom said that in 1997\/1998, the Association of Coffee
\nProducing Countries gave Indonesia an export quota of 350,000
\ntons a year.<\/p>\n
However, the export quota could not be met because production
\ncontinued to decline.<\/p>\n
Noer said the U.S. Department of Agriculture (USDA) estimated
\nIndonesia's coffee production could fall to 6.6 million
\n60-kilogram bags (396,000 tons), in the 1998\/1999 coffee year,
\ndown 6 percent from 1997\/1998.<\/p>\n
The USDA also estimated that the country's coffee exports
\ncould drop to 4.6 million 60-kilogram bags (270,000 tons), in
\n1998\/1999.<\/p>\n
The country exports its robusta to the U.S., Japan, Germany,
\nSingapore, the United Kingdom and several other European
\ncountries. Its high-grade coffee is exported to Japan and to the
\nU.S.<\/p>\n
Japan is Indonesia's largest coffee export-destination country
\nin Asia, as is Germany in Europe.<\/p>\n
The USDA also estimated that domestic coffee consumption in
\nIndonesia for 1998\/1999 was forecast to be 120,000 tons, compared
\nto 126,000 tons in 1997\/1998.<\/p>\n
The USDA said the decline in consumption was due to a
\nweakening purchasing of Indonesian consumers, caused by the
\nprolonged economic crisis.<\/p>\n
Noer said Indonesia normally produced between 450,000 tons and
\n500,000 tons of coffee per annum, of which 120,000 tons went to
\ndomestic consumption.<\/p>\n
\"But in a situation like this, when the purchasing power of
\nmost people is decreasing, domestic coffee consumption is likely
\nto drop to 90,000 tons.\"<\/p>\n
Prices<\/p>\n
Noer said world market coffee prices depend on Brazil's coffee
\noutput.<\/p>\n
\"If Brazil's production is only 34 million bags (2.04 million
\ntons) in 1998\/1999, prices will drop. But the USDA has predicted
\nthat Brazil coffee output could reach 35.8 million bags in
\n1998\/1999 due to favorable weather,\" he said.<\/p>\n
He said the USDA predicted Brazil could export 23.3 million
\nbags (1.39 million tons) of coffee beans this coffee year.<\/p>\n
Brazil produced over 23.5 million bags (1.4 million tons) of
\ncoffee in 1997\/1998, followed by Colombia with 800,000 tons.<\/p>\n
He said coffee prices in the local market were also kept high
\nby the sharp decline of the rupiah's value against the dollar.<\/p>\n
\"The rupiah's fluctuation will continue to be a price mover in
\nIndonesia's local coffee market throughout 1999,\" he said.<\/p>\n
The rupiah, like other Southeast Asian currencies, has been
\nhit by speculative attacks since early July, last year losing
\nmore than 50 percent of its value against the greenback.<\/p>\n
Kirom said the price of grade-four robusta peaked to over Rp
\n15,000 per kilogram in Lampung in May, when the rupiah nosedived
\nto Rp 17,000 per dollar.<\/p>\n
Last December, it hovered at Rp 7,500 per kg, when the rupiah
\nwas quoted at Rp 5,600 against the dollar.<\/p>\n
He said farmers got a windfall from the rupiah's depreciation
\nwhile exporters faced difficulties due to an increase in the
\nprice of beans, transportation, warehouse costs, high interest
\nrates and fierce competition.<\/p>\n
The high lending rates imposed by the government on farming
\nactivities have been a burden to increasing coffee exports.<\/p>\n
\"For example, lending rates imposed by the Vietnam government
\non farming-related activities is only 6 percent, compared to more
\nthan 40 percent in Indonesia,\" he said.<\/p>\n
Noer said coffee was currently the third-largest foreign
\nexchange earner among plantation commodities after rubber and
\npalm oil, contributing 22 percent of the agricultural export
\nvalue, and 1.66 percent of total export earnings.<\/p>\n
Noer said that Vietnamese coffee is still the biggest threat
\nto Indonesian coffee.<\/p>\n
\"This (coffee) year, Vietnamese coffee exports are expected to
\nincrease again partly due to the full support of Vietnamese
\ngovernment,\" he said.<\/p>\n
The USDA estimated that Vietnam's coffee production during
\n1998\/1999 will be 5.8 million bags (348,000 tons).<\/p>\n
Vietnam's coffee exports during the year are forecast to be
\n5.8 million bags (348,000 tons), an increase of 5 percent over
\n330,000 tons in 1997\/1998.<\/p>\n
Table: Indonesia's coffee exports, coffee years from 1985\/1986 to
\n1997\/1998.<\/p>\n
Coffee year* Volume (tons) Value (US$)<\/p>\n
-----------------------------------------<\/p>\n
1985\/1986 303,835 779,536<\/p>\n
1986\/1987 297,314 629,945<\/p>\n
1987\/1988 271,019 521,555<\/p>\n
1988\/1989 377,889 576,223<\/p>\n
1989\/1990 403,360 356,590<\/p>\n
1990\/1991 336,928 320,784<\/p>\n
1991\/1992 267,459 246,267<\/p>\n
1992\/1993 356,565 335,834<\/p>\n
1993\/1994 301,844 670,614<\/p>\n
1994\/1995 188,572 555,790<\/p>\n
1995\/1996 367,201 704,674<\/p>\n
1996\/1997 381,512 638,120<\/p>\n
1997\/1998** 321,024 576,352<\/p>\n
Source: AICE<\/p>\n
* Coffee year starting Oct. 1 until Sep. 30.<\/p>\n
** As of September 1998.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/el-nino-continues-to-haunt-troubled-ri-coffee-growers-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }