INDONESIA— According to a Global Agricultural Information Network report from the United States Department of Agriculture’s Foreign Agricultural Service (FAS), Indonesia’s coffee production for the market year (MY) 2023/2024 has been forecasted at 9.7 million bags, a decrease of 18 per cent from last year.
This decline is attributed to weather-related disruptions during the cherry development stage.
Additionally, Indonesia’s coffee consumption is forecasted at 4.79 million bags in 2023/24, representing a slight increase of 20,000 bags from the previous year.
The domestic consumption slowdown observed in 2022 is expected to persist into 2023 due to rising fuel and commodity prices.
As a consequence, the higher costs may lead consumers to shift towards more affordable coffee products, such as bottled ready-to-drink (RTD) coffee.
Despite these challenges, coffeehouse chains continue to dominate the coffee market, catering to both low and high-end consumer groups.
The expansion of these chains over the past few years is anticipated to persist, with their resilience expected even in the face of weakened consumer purchasing power.
According to FAS, the retail coffee sector is witnessing the growth of non-coffeehouse chains, including supermarket cafes, convenience stores, and hypermarkets, intensifying competition in the market.
In light of the challenging market conditions, the report revises down Indonesia’s coffee bean export forecast for 2023/24 to 5 million bags.
This adjustment is based on weak demand, reduced export volumes, and continued higher Robusta bean prices in the first half of the marketing year.
Exports of green coffee beans are estimated at 2.5 million bags between April and September 2023.
Shipments to the U.S. total 354,000 bags, reflecting a 31 percent decrease compared to the corresponding period of the previous year.
Although exports to Egypt and the United Arab Emirates (UAE) increased, they were insufficient to offset reduced demand from the U.S. and other destinations.
As a result of lower domestic stocks, importers procured an estimated 393,000 bags of green coffee beans from April to September 2023, mainly from Vietnam (64 percent) and Brazil (21 percent).
The report projects that green bean imports will expand to 700,000 bags in 2023–24.
This expansion may provide some relief and contribute to stabilizing the market amid the ongoing challenges faced by the Indonesian coffee industry.
