Indonesia's coffee exports fall 18.7%

JAKARTA (JP): Freak weather patterns are blamed for an 18.68 percent slump in the country's coffee export volume in the crop year ending September 1998.

Coffee exports dropped to 309,000 metric tons worth US$550 million, compared to 380,000 tons of $675 million the previous crop year, data from the Association of Indonesian Coffee Exporters shows.

The association's executive secretary, Noer Madjid, attributed the decline to falling domestic output due to the El Nio weather phenomenon which caused a prolonged drought last year.

Noer predicted the crop's output would continue to decline this crop year by a further 30 percent because of the La Nia reverse weather pattern which would bring higher rainfall than normal.

"In 1997, we were assaulted by El Nio, and right now we are hit by La Nia. And this La Nia is more dangerous than El Nio," Noer told The Jakarta Post on Monday.

Heavy rains have affected coffee crops in South Sumatra, Lampung and Bengkulu, which together account for about 65 percent of the country's production.

Indonesia is the world's biggest grower of robusta coffee, providing 24 percent of global robusta production. Indonesia is also the third largest coffee producer, after Brazil and Columbia, contributing 7 percent of total output.

Noer said Indonesia normally produced between 450,000 tons and 500,000 tons of coffee per annum, of which 120,000 tons went to domestic consumption.

"But in a situation like this when purchasing power of most people is decreasing, domestic consumption of coffee is likely to drop to between 90,000 and 100,000 tons."

Following the acute depreciation of the rupiah against the U.S. dollar, coffee producers have preferred exporting their products.

Most of the country's coffee exports go to Western Europe (36 percent of the total), Japan (18 percent), North Africa (17 percent) and Eastern Europe (13 percent).

Japan is Indonesia's largest coffee export destination country in Asia, and Germany is in Europe.

The value of coffee exports have fallen from $818 million in 1986 to less than $600 million in 1996.

Annual export earnings of coffee between 1986 and 1996 averaged $503 million, some 1.66 percent of total export earnings.

Noer said coffee was currently the third largest foreign exchange earner among plantation commodities after rubber and palm oil, contributing about 22 percent of the agricultural export value.

Despite the comparative decline in the share of coffee in total export earnings, which largely reflects low global prices in the early 1990s, coffee remained an important export crop, especially for provinces in Sumatra, Sulawesi and Nusa Tenggara. (29)