Coffee production likely to drop 10 percent
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)