Coffee Downstreaming Succeeds, Why Is Tea Lagging Behind?

Indonesia is witnessing a silent failure: one commodity rises to become a symbol of global lifestyle, while another—once more prosperous—is slowly abandoned by the market. Coffee soars, tea lags behind. The issue is no longer about potential, but why transformation works for one commodity and fails for the other. This difference cannot be read merely as market dynamics, but reflects the direction of an uneven economic transformation—where one sector succeeds in building value, while another is trapped in old patterns. In recent years, Indonesian coffee has shown strong momentum. Export value even breaks through around $1.6 billion USD, supported by a global market that remains open and growing domestic consumption. Indonesia’s domestic coffee consumption in the 2024/2025 period is projected to reach 4.8 million bags (equivalent to 60 kg per bag), up from 4.45 million bags in 2020/2021. On the production side, Indonesia produces around 654,000 tonnes of coffee in 2024, equivalent to about 6 percent of global production and placing Indonesia as the world’s fourth-largest producer. More than that, coffee has transformed from a mere commodity into part of social identity—supported by the expansion of coffee shops, product innovation, and digital market penetration. Unlike coffee, the tea sector faces far more complex pressures. Indonesia’s tea production in 2023 was around 122–124 thousand tonnes, down from about 165 thousand tonnes in the early 2000s. Production is declining, land is shrinking, and Indonesia’s position in the global market continues to erode. Over the past two decades, Indonesia’s position as a global tea exporter has dropped from the top three to around seventh place. This decline is not because the market is shrinking—in fact, global demand grows by around 3 percent per year—but due to weak competitiveness in quality, price, and supply continuity. In other words, the tea problem is not cyclical, but structural. The paradox becomes even clearer when the domestic market is filled with imported products. In 2024, tea imports reached around 13 thousand tonnes, a sharp increase from the previous year.