Indonesia's coffee output seen down 15-20 percent

Indonesia's coffee output may fall by 15-20 percent in the 2010/11 (October-September) crop year to as low as 520,000 tonnes as rains damage coffee cherries, the Indonesian Coffee Exporters Association said on Wednesday. The estimate was similar to a forecast by the International Coffee Organisation in April that output from the world's second biggest producer of robusta would fall by 25.3 percent to 8.5 million bags of 60-kg each, or 510,000 tonnes.
Harvests in Indonesia's main growing island of Sumatra usually begin in March or April, but yields are down as farmers have been picking cherries since January after persistent rains caused the flowering season to begin earlier in some districts. The disruptions could underpin London robusta futures, which have gained more than 20 percent to above $2,600 a tonne this year, partly due to tight supply of high-quality beans. Robusta - used in instant coffee - mostly grows in Lampung, Bengkulu, and South Sumatra provinces at the southern end of Sumatra island and accounts for about 85 percent of Indonesia's coffee production. The rest is higher value, aromatic arabica coffee.
Exporters in Indonesia have cancelled export shipments of at least 3,000 tonnes for April and May due to a bean scarcity as La Nina-driven rains hit plantations and due to competition with local roasters. "Exporters are more cautious because with an expected lower output and strong prices, people will be fighting to get their hands on cargoes," said Husein.
PRODUCTION PROBLEM Ageing coffee trees are also compounding production problems as they have lower yields, preventing Southeast Asia's biggest economy from boosting output to meet both export and demand from domestic roasters, which grew by an average around 4 percent since the mid-1980s.
Indonesia has around 1.3 million hectares of coffee plantations with smallholders accounting for 95 percent of the plantations. The remainder is owned by state plantation firms and private plantation firms. "It's good that demand is growing but the problem is how we can increase production," said Husein. The association plans to meet with the government and discuss programmes to boost output, including replanting smallholders' plantations.