Indonesia’s output is forecast to drop to a three-year low of 8.90 million 60-kilogram bags in 2014/14, from an estimated 10 million bags a year ago, according to a survey of six dealers and analysts led by Reuters.
The fall in production is attributed to attributed to the unfavourable weather conditions coupled with higher domestic consumption, that will soak up about half the produce.
Coffee consumption in Indonesia may jump 33% a record in the next two years as population and income increase in Southeast Asia’s largest economy.
Demand will probably rise to 400,000 metric tons in 2016 from an estimated 300,000 tons this year and 260,000 tons in 2013, Irfan Anwar, chairman of the Association of Indonesian Coffee Exporters and Industries, told reporters at a conference in Jakarta.
“Population is increasing, income per capita is increasing and lifestyle is improving,” said Irfan, who estimated that the share of arabica production will rise to 25 percent in three years from 19 percent in 2013. “Improvement in coffee quality is also helping boost consumption.”
