Coffee production likely to drop 10 percent

JAKARTA (JP): Heavy rains followed by a prolonged dry season will likely cause a 10 percent decline in Indonesia's coffee production this year, the Association of Indonesian Coffee Exporters (AICE) predicted yesterday.

The association's secretary, M. Noer Madjid, told The Jakarta Post here that heavy rains early this year delayed the country's April harvests.

He added that the current severe dry season is expected to further affect production.

"In normal circumstances, the country's production can reach 450,000 tons per year. But this year we expect production to reach only 400,000 tons."

Madjid also said Indonesia's coffee production in the 1992- 1993 coffee year, between October 1992 and September 1993, reached 440,318 tons.

Coffee production between October 1993 and June 1994 was recorded at 150,000 tons.

Indonesia, a major producer of Robusta coffee, currently has 1.1 million hectares of coffee plantations, of which only 900,000 hectares are productive. About 90 percent of the plantations are owned by farmers.

Negligence

"Farmers, discouraged by low prices in the last five years, have neglected their plantations," Madjid said, adding that prices hit the lowest level of 90 U.S. cents last year.

Madjid said the country's coffee exports fell from 408,000 tons worth US$338.44 million in 1989-1990 to 378,000 tons worth $342.36 million in 1990-1991 and 264,000 tons worth $243.59 million in 1991-1992, before increasing back to 354,000 tons worth $335.84 million in 1992-1993.

The current harvest failure, in addition to frost attacks in Brazil, the world's largest producer, has raised prices to a much higher point on the world market. Brazil's production this year is predicted to decline by 20 percent from its annual output of 1.7 million tons.

"Unfortunately, the neglect of their plantations has prevented farmers from taking maximum advantages from the recent increases in coffee prices on the world market," he said.

Madjid said Robusta prices on the world market currently range between US$3.50 and $4.24 per kilo, while Arabica costs $6.89 per kilo.

Prices paid to Indonesian farmers range between Rp 6,500 ($2.99) and Rp 6,800 per kilo.

Despite the brighter price outlooks, Madjid reminded exporters to closely monitor price developments on international markets and to refrain from hastily closing deals in order to avoid major losses.

Asked about future trends in prices, Madjid said the current price level has reached its peak and is expected to gradually decline in the future because the high prices are encouraging farmers to increase production.

On Monday, coffee prices on the London futures market slumped to $3,380 per tons from $4,085 last weekend. (yns)