National coffee exporters joined under the Indonesian Coffee Exporters Association (AEKI) started to eye the domestic market which is very potential for coffee trade. In addition to the increasing demand for coffee trade. In addition to the increasing demand for coffee, sluggishness of the export market is one of the factors that stimulate coffee exporters to focus more on domestic market. AEKI reported that realization of coffee export in 2011 declines to 250,000 tons from 2010 at 443,000 tons. Decline in the volume of coffee export is because national coffee production in 2011 declines by around 550,000 tons from 600,000 tons in 2010 due to bad weather.
General Chairman of AEKI, Suyanto Husein, said that decline in the volume of coffee export is also because production in coffee producing countries which is almost complete. And, currently, price of coffee domestically tends to be higher than price in the export market. Suyanto reported that average coffee price in International Coffee Organization (ICO) reaches USD 192.66 per ton. One pound is equivalent to 0.45 kilograms (kg).
The price declines by 16.6% from highest average price throughout 2011 that reaches USD 231.24 per pound. Even though export is declining, according to Suyanto, the percentage is still higher than businessmen’ estimates. “Businessmen once predicted that coffee export in 2011 will only reach 300,000 tons or declines from 2010 at 443,000 tons”, Suyanto said.
Suyanto was optimistic that the domestic market will increase in line with domestic demand for coffee which increases, or around 240,000 – 250,000 tons. The increase has been going on continuously since 2009. According to him, increase in coffee demand is due to an increasing number of new coffee shops. In addition to that, he also said that the selling price domestically is higher than selling price in export market. He explained that the present composition is: production 550,000 tons and export 320 tons. And, the remaining is distributed to domestic industries.
He admitted that at present, coffee trade in international market is not so buoyant. ICO reported that volume of coffee trade in October 2011 only reaches 7.1 million bags or equivalent to 426,551 tons. This rate declines by 3.65% from trade volume in September 2011 at 7.37 bags or equivalent to 442,712 tons. This substantially affects Indonesia’s coffee trade. Sluggishness of international coffee trade is also reflected in the decline of coffee export from Indonesia.
Sutanto, quoting a report released by ICO, stated that the reason of the decline in coffee production that the reason of the decline in coffee production in Indonesia is also worsening weather in coffee plantation centers. Besides Indonesia, production decline also occurs in India which experiences similar problem. A similar problem is also experienced by Vietnam whose coffee production declines by up to 5% in 2011.
Similar condition also hits some Latin American countries, such as Mexico and Central America whose production declines by around 4.6% from 19.2 million bags to 18.4 million bags. With the production decline, production target fro 2011 set by the Agriculture Ministry will certainly be missed. Coffee production only reaches 550,000 tons or below the target at 690,000 tons.