It is a little-known fact that Indonesia is among the oldest coffee growing nations. The world’s third largest producer over the past five years, Indonesia started planting coffee more than 300 years ago. For much of the past 30 years, Indonesia’s production figures made it one of the world’s most stable coffee nations with output between 6.5 million and 7.5 million 60-kilogram bags per year. That all changed in the 2009-10 crop cycle when production numbers were suddenly raised to 11.4 million bags, which stoked the curiosity of many in the industry. The answer was quite easily traced to the fact that for years, nobody had incorporated the growth in local demand, which by 2010 had reached 3.3 million bags, according to figures from the International Coffee Organisation and the Association of Indonesian Coffee Exporters (AEKI). As the 2012-13 harvest is being wrapped up in Indonesia’s main producing regions on the island of Sumatra – home to between 65 and 70 per cent of total output – and picking of the new 2013-14 crop has started in the growing regions of Java and Sulawesi, uncertainty is once again prompting speculation in the market. “We have never before seen the weather changing this much from one year to the next,” says Irfan Anwar, President Director of Medan-based PT Coffindo coffee exporters, which started business in 1999 and handles some 120,000 bags of coffee a year. “From one region to the other the effect of climate change here is really felt very much in all the coffee growing areas in Indonesia.” According to AEKI figures, the 2011-12 harvest ended at about 8.6 million bags and preliminary figures show that production in the now completed 2012-13 harvest reached between 9 million and 9.2 million bags. “We believe the harvest which has just ended was a little bit better than the year before and overall production did go up about 5 per cent,” Anwar tells Global Coffee Review. Anwar’s company, PT Coffindo coffee exporters, which was named Indonesia Best Exporter in 2010 by AEKI, has its headquarters in Medan, located on the south-eastern border of Sumatra within the Aceh province. While AEKI has yet to release any forecast for the new harvest the United States Department of Agriculture (USDA) recently said it expects the ongoing negative impact of weather to once again lead to reduced harvest output in the 2013-14 crop. The USDA also said the 2012-13 harvest failed to surpass the 10 million bags initially forecast due to a number of weather problems from drought to excess rains, ending instead with 9.7 million bags. Weather and the impact of climate change continues to affect production in the new 2013-14 harvest, which has been reduced by more than 500,000 bags to 9.165 million bags, according to the USDA’s forecast for the new cycle released in its biannual report on 15 May. “Indonesia coffee production is expected to decline by 5.5 per cent in [crop year] 2013-2014,” the USDA report says. “Lower production is principally due to poor weather; drought conditions during flowering, followed by excessive rainfall during early cherry development.” Drought occurred in 85 per cent of major Indonesian coffee production areas during the critical flowering period from June to September 2012, which led to poor conditions for flowering and resulted in many flowers not maturing into coffee cherries. “By contrast, during the onset of the most recent cherry development stage [December 2012 to January 2013], most Indonesian production areas received above average levels of rainfall. Heavy rains pounded young coffee cherries and a significant portion of the cherries were lost as a result,” the USDA report says. When coffee cherries receive too much rain at the crucial stage of bean formation halfway through the flowering season, the excess rains prevent the bean from developing adequately. This causes either black or hollow beans, known as floaters, while the bean size is also reduced. Local trade and exporters in Indonesia agree with the USDA and say the weather has offered no helping hands to producers hoping to repeat the bumper crop of four years ago. “There is always a conflict over data in Indonesia, especially in areas like Aceh, where the current situation and the significant impact from weather has had its effect,” says Edi Susmadi, Owner and Director of the Pt Soegee Gayo Indonesia coffee company, which exports fully-washed Gayo Arabica coffee from Aceh and Mandheling Arabicas. “The Mandheling harvest is tight, but not so much because of low production as the unpredictable weather pattern in Northern Sumatra,” says another Indonesian coffee trader in the Mandheling region. “Fly crops are taking longer time than the normal crop to mature, and the normal crop has been maturing in a much shorter period of time.” Comments such as these have become the norm during harvest times in Indonesia recently, and coffee scientists in Indonesia and abroad agree: the most typical changes seen in coffee cultivation in northern Sumatra today include higher average temperatures year-round, drier wet season in January and February, and higher rainfall at the peak of the dry season, from June to August. Naturally, all of these factors severely impact the coffee trees’ flowering and maturation patterns. But if production forecasts are unlikely to provide the export market and trade with greater certainty until the main 2013-14 harvest begins in Sumatra in October, the one number that is sure to rise is domestic consumption. Analysts and industry officials say that the growing popularity of coffee drinking during the past 10 years will continue to cut into the volume of Indonesian beans available for exports. “The coffee consumption in the domestic market continues to grow significantly, so we have to reduce our coffee exports,” says AEKI’s Anwar. The main focus across Indonesia’s coffee industry at the moment is on improving quality and raising the productivity of producers in the world’s fourth most populous country to ensure that future consumption is met without neither cutting further into exports nor relying on imports. Even in Indonesia’s 2009-10 record harvest, the country’s 3.6 million growers, who with a handful of exemptions are all small-holders with about 1-2 hectares of land, registered average yields of only 8.5 bags per hectare. Many Indonesian farmers have in recent years also replaced coffee with other tropical crops such as palm oil and cocoa, which have generated higher earnings. The USDA, for instance, says the coffee area ahead of the 2013-14 crop has been reduced to 1.25 million hectares. “There is a lot of foreign interest in programs that seek to address these issues and we want to improve the productivity and try to improve the challenges from climate change at the same time,” says Anwar, adding that companies such as Louis Dreyfus, Neumann and certification programs like Rainforest Alliance and Utz all are actively involved in Indonesia. Indonesian imports have surged in the past three years to between 1 million and 1.45 million bags. Analysts estimate that Indonesian consumption is headed to between 4.2 million and 4.5 million bags by 2016. As a result, the internal competition in Indonesia’s coffee market is expected to grow accordingly.