Prospects of Indonesian Coffee Exports in the International Market
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- On December 9, 2020
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- Global coffee association, Global coffee beans market, Global coffee festival, Global coffee market, Prospects of Indonesian Coffee Exports, The global coffee industry, The global coffee market
Coffee is estimated to be one of the most popular drinks in the world with a consumption of 6.7 million tonnes per year and almost all citizens in the world consume coffee every day. Not only favored by men but women also really like this one drink.
Coffee as a drink is the result of a value chain that begins with the cherries produced by the tree. The coffee tree needs a warm climate without sudden temperature changes, does not tolerate frost, and requires a lot of seasonal rainfall.
In the world, coffee is known to have two species that are cultivated commercially, namely arabica coffee and canephora coffee (better known as robusta). In the early 2000s, arabica coffee accounted for 64% of global coffee production. Two other species that were traded until the Second World War were Liberica coffee and Excelsa coffee. However, now it has almost completely disappeared from trading.
Coffee Has Changed The Historical
As a globalization trend, coffee has transformed more than just how men and women recently expressed their joy towards each other’s society or their anxiety about local and national politics. When discussing coffee, the popularity of coffee has changed the historical linkages between consumers, producers and suppliers. In this sense, coffee is a lens to reflect on the relationship that exists between those who enjoy a drink and those who produce coffee.
Coffee consumption in Indonesia has almost doubled in the last 10 years. This is because many young Indonesians are influenced by the habit of drinking coffee. This culture of drinking coffee has also been carried over to countries such as Australia, the United States, and other places where many of them are students studying abroad.
The Global Leader of Food and Beverage at Euromonitor International, Michael Schaefer said that they see a very strong expansion of coffee in many markets but Indonesia is a market where the demand is growing very big and fast. Meanwhile, major producing countries such as Brazil, Vietnam and Indonesia have historically exported their best coffee, increasing interest in premium beans from local coffee shops.
In Indonesia, the number of coffee exports has promising potential for economic development, the types of coffee products exported are green coffee beans (raw coffee) and roasted coffee beans and processed coffee (coffee powder), but most of the coffee exports are in Indonesia. dominated by coffee beans compared to the amount of processed coffee exported to foreign markets.
International Coffee Organization
While the ICO (International Coffee Organization) noted that shipments from Indonesia rose 37.3% to 475,318 million bags in March 2019 compared to March 2018, shipments for April 2018 to March 2019 fell 33.7% to 5.15 million bags. This was the lowest shipment volume from April 2011 to March 2012.
However, supply was limited at the start of the 2018/19 harvest year due to a 6.4% drop in production in the 2017/18 crop year to 10.8 million bags while exports increased by 12.6% to 7.76 million bags. Limited supply, coupled with growing domestic demand, currently estimated to be 2.1% higher than last year’s 4.8 million bags, has contributed to the decline in exports in the last 12 months.
In 2018, the export value received by Indonesia from the United States was 410,073.00 (USD thousand), which is the highest export destination country in the world. Then Germany amounted to 78,333 (USD thousand), France 14,654 (USD thousand), Italy 59,806 (USD thousand), and the Netherlands 39,774 (USD thousand), the database was obtained from the ICO.
Arabica coffee has better quality, high taste, higher price than Robusta coffee. Robusta coffee has a more bitter taste, and robusta is often processed into instant coffee or as other components at a lower cost as a roasted blend.
Arabica coffee produced by the Sumatra
Arabica coffee produced by the Sumatra region has unique characteristics due to the drying process of the coffee beans there. It can be seen from several awards that have been won by coffee produced by Indonesia. Last year, Indonesia received an award at the Agency for the Valorization of the Agricultural Products (AVPA) event in France.
Having a distinctive and unique coffee taste, farmers in other countries have tried to imitate Sumatran coffee, but importers say the coffee produced is not as good as coffee from Sumatra and can only produce on a small scale.
InterContinental Coffee Trading Inc
Babington Smith is a senior merchant importer of InterContinental Coffee Trading Inc. California, explained that the price of unprocessed or partially dried Sumatran Arabica coffee purchased on farms has increased by US $ 5.90 / kg in April. Meanwhile Arabica beans already in US warehouses fetched a premium of US $ 2.20 / lb or more above the global benchmark price, nearly double the price last year.
Despite having a high demand, Indonesian coffee still has weaknesses from other exporting countries. One of them is that the quality of Indonesian coffee is still far from that of Brazil and Vietnam. This means that even though Indonesia is one of the largest exporting countries, Indonesia does not yet have a comparative advantage. The cause of the low quality of coffee exports in Indonesia is because 90% of the coffee exported outside is in the form of green coffee.
Indonesian Coffee Farmers
In addition, most Indonesian coffee farmers are small farmers with limited skills that make most Indonesian coffee harvest coffee when it is still green. In addition, the coffee did not reach the recommended moisture content (12.5%), so a lot of coffee was moldy and cracked due to the use of a poor peeler.
The quality of raw materials that is not good enough to reduce the level of consumer confidence in consuming processed coffee products. Other problems experienced by downstream industry players are the lack of availability of facilities and infrastructure, the existence of obstacles in regulations, especially labor, taxation and trade, lack of motivation from entrepreneurs, lack of capital, processing and packaging technology that has not been fully mastered, and the quality of human resources for product marketing. inadequate downstream.
By bringing quality Indonesian coffee beans to the global market, Global Coffee Indonesia is a part of the solution in promoting Indonesia commodities and community empowerment.
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