Indonesia’s export levels are set to drop

The Jakarta Globe has reported that Indonesian exports of coffee could drop by a fifth to some of the lowest levels seen in the past three years.

The reasons given are partly down an increase in wet weather which cut output of robusta beans but also a forecasted an increase of the amount of coffee drunk in the archipelago thanks to elections and the upcoming FIFA World Cup.

Industry group, the Oversea-Chinese Banking Corp, say that an election campaign usually boosts overall consumption for a number of resources ranging from rich to sugar and, of course, to coffee.

Wellian Wiranto, an economist with OCBC discussed the campaign frenzy that will soon be hitting Indonesia:

‘As various parties try to drum up support,’ he began, ‘it wouldn’t seem like a proper campaign-party atmosphere if there is no loud music, colourful t-shirts and free food and beverages including cups of coffee’.

Voters and activists need to be wooed and fuelled after all.

The World Cup too will trigger a further rise in domestic demand, especially as most of the major games in Brazil will kick off at 3am local time for the many Jakartan football fans. ‘Soccer fans will be staying up overnight at home or at a café. Wherever there’s a TV people will watch…and drink coffee,’ Pranoto Soenarto, head of speciality coffee at an Indonesian export group said.

This could be fantastic news for the likes of Mayora Indah, the maker of Torabika instant coffee, and the Kapal Api Group who own a number of coffee shops across Indonesia.

A Bloomberg survey suggested that Mayora may see a 3.3% increase in net income this year.

Coffee crops have been hit as a period of wet and windy weather disrupted flowering in the main growing regions of Lampung, South Sumatra and Bengkulu. The island of Java and Sumatra received as much as thirty inches of precipitation in the past month – touching 300% above the average in some locations – increasing the risk of crop disease.

picture: Fry1989, used under creative commons