USDA reports significant production gains for Indonesia

The United States Department of Agriculture (USDA) has reported a 20 per cent rise in production in Indonesia, despite dry conditions and widespread fires. In its recent semi-annual report, the USDA puts Indonesia’s total production at 10.6 million, 60-kilogram bags for marketing year 2015-16. Robusta is placed as the driver of the higher yields, as bean maturation and harvest occurred prior to the unusually dry period, which started in July. The USDA reports 9.3 million bags of Robusta to come from the recent crop. Arabica production is not expected to avoid the unfavorable El Nino conditions, with the main harvest period coinciding with unseasonably dry weather. The USDA reports 1.3 million bags of Arabica, a 10 per cent decline on last year’s figures. “Indonesia is experiencing a strong El-Nino phenomenon, although our weather data analysis characterises it as weaker than the El Nino experienced in 97-98,” said USDA. Data from Indonesia’s weather agency, BMKG, indicates that below-normal rainfall has been felt throughout most of Indonesia’s coffee producing regions. “While many of the regions typically experience dry weather in July and August, the dry period has extended into November,” said USDA. Despite the positive outlook from the US, which is the country’s biggest importer, fire is currently raging across the 5000-kilometre length of Indonesia. The areas affected include the coffee growing region of North and South Sumatera, Java, Southern Kalimantan, Southern Sulawesi and West Nusa Tenggara. Despite the huge environmental impact, the fires are deliberately lit to clear land for palm oil plantations. Two years after stating publicly that it was committed to using sustainably sourced palm oil, Starbucks commitment to this promise is still being questioned. Consumer group, SumOfUs launched a video campaign in August to educate coffee drinkers on Starbucks ethical sourcing decisions. In contrast to the lack of transparency on its palm oil imports, Starbucks announced earlier in the year that 99 per cent of its coffee is now ethically sourced. USDA is expecting Indonesia’s coffee exports to finish at approximately 8.08 million bags in marketing year 2015-16. “Increased exports are the result of strong Robusta production, a weakened Rupiah and declining Robusta prices,” said USDA. “The Rupiah has depreciated more than 18 percent since August 2014, improving Indonesian export competitiveness.” Weather agencies are reporting that El Nino is expected to last until February 2016.