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Coffee Harvest in Indonesia Expanding to Record on Rainfall

Published on Mar 24 2015 9:31 AM in Supply Chain tagged: Coffee / Indonesia

Coffee Harvest in Indonesia Expanding to Record on Rainfall

Coffee farmers in Indonesia, the world’s third-biggest producer of the Robusta variety used by Nestlé, will probably harvest a record crop in the season starting April after rains boosted yields.

Production may increase 18 per cent to 650,000 metric tons from 550,000 tons a year earlier, the median of five trader estimates compiled by Bloomberg shows. That would exceed the all-time high of 630,000 tons in 2009-2010 and matched in 2012-2013, according to US Department of Agriculture data.

The unprecedented harvest in Indonesia will add to global supply, potentially pressuring prices. A survey this month showed production could increase to a record in Vietnam, the largest Robusta grower. Crop prospects have also improved in Brazil, the second-biggest Robusta producer and the top supplier of Arabica beans favoured by Starbucks.

“There’s fresh optimism that output will rise,” Theng Hong Sioe, a deputy chairman at the Association of Indonesian Coffee Exporters and Industries, said on 19 March. “The weather is quite favourable, it’s not too wet or too dry. Hopefully there’s no adverse weather that could hurt the crop.”

The global harvest will expand 7 per cent to 152.8 million bags in 2015-2016 and cut the shortage to 1.4 million bags from 8.9 million bags this year, Volcafe Ltd. said last month. Output in Indonesia may climb to 10.9 million bags, it said. A bag weighs 60 kilograms, or 132 pounds.

Rabobank International says the deficit will shrink to 1.6 million bags from 6 million bags and Indonesia will harvest 12.3 million bags from 9.3 million bags a year earlier.

“We have seen a slightly better weather pattern during the development of the 2015-2016 crop, although still far from perfect weather,” said Carlos Mera Arzeno, senior commodities analyst at Rabobank in London. “In any case, after a low crop in 2014-2015, trees should have more energy for the 2015-2016 crop. Rainfall during the harvest will impact quality but it will hardly impact volumes,” he said.

Bloomberg News, edited by ESM


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