Vietnam overtakes Indonesia in world coffee production

JAKARTA (JP): Indonesia's position as the world's third largest coffee producer after Brazil and Columbia has been taken by Vietnam due to a fall in local coffee production, according to the Association of Indonesian Coffee Exporters.

The vice president of the East Java chapter of the association, Asrikan Isdarmawan, said Indonesian coffee also lagged behind in terms of quality.

"Indonesia needs to increase the quality of its coffee to be able to compete in international markets," he was quoted by Antara as saying on Friday.

Vietnam's coffee production reaches 650,000 tons to 700,000 tons a year, while Indonesia's annual coffee output ranges between 380,000 tons and 450,000 tons a year.

Asrikan said the low quality had further undermined the price of Indonesian coffee in the international market.

"The oversupply in international markets has caused coffee prices to keep falling," he said, citing that the current coffee price of Rp 4,000 a kilogram, which is half the price of coffee early last year.

The oversupply of coffee in international markets has caused a decline in coffee prices, forcing the Association of Coffee Producing Countries (ACPC) to implement a retention plan for its member countries, including Indonesia.

Coffee prices in international markets hovers between 60 U.S. cents and 69 cents per kilogram.

ACPC requires its members to withhold 20 percent of their exports until prices hit 95 cents a pound on the 15-day average of the International Coffee Organization's composite index indicator.

Asrikan said that the weakening of coffee prices in international markets had discouraged East Java coffee producers from exporting, adding that only 20 exporters were currently active from about 100 previously. (tnt)