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Sunday, November 28, 2010

Indonesia to Further Develop its Coffee Plantations

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Jakarta (ANTARA News – Djakarta News) - To maintain its position as the world`s biggest coffee producer, Indonesia is to reverse a decline in production by seriously developing its coffee plantations starting next year.

"Coffee is also a strategic commodity in our rural economy. Therefore, we will include coffee in the plantation revitalization program next year," Agriculture Minister Suswono said on Saturday.

In an effort to develop and increase coffee production in the country, the Ministry of Agriculture will include coffee as one of the commodities to be prioritized in the plantation revitalization program next year.

So far, only three agricultural commodities have been included in the country`s plantation revitalization program, namely oil palm, rubber and cacao.

The inclusion of coffee in the plantation revitalization priority program, is expected to raise coffee farmers` income and the country`s earnings from coffee exports which of late have been declining. According to Minister Suswono, coffee is one of the commodities which are seen to have a good chance to be developed. After all, 90 percent of coffee plantations in the country belong to smallholders.

Based on data provided by the directorate general of plantations, national coffee productivity was still low, namely only about 700 kg per hectare per annum. This figure constituted 60 percent of the real productivity potential.

The ministry of agriculture recorded that Indonesia`s coffee plantation area this year was 1.31 million hectares, consisting of 1.07 million hectares (82 percent) planted with robusta and 241,548 hectares (18 percent) with Arabica coffee.

Of the total plantation acreage, about 96 percent belonged to smallholders, two percent to private firms and the other two percent to state firms.

As Indonesia`s Arabica coffee is quite popular in the world market, the government will focus on the development of Arabica coffee. This type of coffee had contributed 30 percent to national coffee production so that it is expected to increase in the future.

"It is also expected to increase national bio diversity and natural resources," the minister said.

So far, according to Suswono, Indonesia`s Arabica coffee had already been popular and liked in the world market with various types of products such as Toraja coffee, Gayo coffee, Mandailing coffee, Kintamani coffee, Flores coffee or Java coffee.

Yet, the government will also continue to develop its other coffee type, namely Robusta one, whose plantations are mostly cultivated by smallholders. The efforts must be made to improve the quality of smallholders` Robusta coffee. Among the efforts to be made included rejuvenation, diversification and integration of coffee plantation and cow farming.

All this will be made as Indonesia`s coffee production is declining at home due to various reasons. Yet, the Indonesian Coffee Exporters Association (AEKI) expressed optimism that Indonesia`s coffee export target set at 325,000 tons worth US$650 million could be achieved even though coffee production in coffee producing provinces is declining.

"In the middle of this year, the volume of Indonesia`s coffee exports reached 200,000 tons with a value of US$325 million. I am confident the export target is achievable," AEKI executive secretary Rachim Kartabrata said recently.

However, he said, Indonesia`s coffee export volumes this year were expected to drop from 400,000 tons worth US$773 million per annum to 325,000 tons valued at US$650 million.

Kartabrata said that the decline of Indonesia`s coffee exports was due to the fact that coffee production in the region was declining while stocks gathered last year were not exported.

Indonesia`s traditional coffee export markets for Robusta included Japan, Latin American countries, South Africa and Europe, while for Arabica was exported to Germany and the United States.

Indonesia`s competitors for Robusta are Brazil, Columbia, Mexico, Costa Rica and El Salvador. Its competitor for Robusta is Vietnam. "Vietnam is the biggest Robusta coffee exporter in Asia while the Latin American countries were big exporters of Arabica coffee because they grow coffee plantations 1,000 meters above the sea levels," Karbarata said.

Indonesia`s Robusta coffee is produced by the provinces of Bengkulu, South Sulawesi and Lampung while the Arabica type by Aceh and North Sumatra. "About 80 percent of Indonesia`s coffee exports are those of the Robusta type while the remainders are Arabica," Kartabrata said.

In efforts to expand its coffee export market, Indonesia has asked Germany to jointly develop common markets, especially for technological and agricultural products such as palmoil, coffee and cocoa.

Indonesian Deputy Agriculture Minister Bayu Krisnamurti made the statement after speaking before more than 150 German businessmen in a seminar held as part of an "Indonesia Business Day" recently.

He emphasized the importance of partnership as a key to cooperation between Indonesia and Germany. "As one of the strongest economies in Europe with increasing consumers` demand Germany needs the right partner to cooperate with," he said.

Indonesia with more than 225 million population has been known as one of the three countries that made a positive growth in 2009 and could be one of the right partners for Germany, he said.

The world most populous country China is also a target for the country?s coffee exports. Indonesia recently took part in the Shanghai World Expo 2010, where, during the promotion event, it organized a drink coffee ritual program to attract Chinese consumers.

"We have chosen a special stand for Indonesian original coffee and it has attracted quite many numbers of buyers. Hundreds of glasses of coffee could be offered every day," Trade Minister Mari Elka Pangestu said.

According to trade ministry data, Indonesia`s coffee exports to China from January to April 2010 reached US$0.53 million, up 31.3 percent from the same period last year.
In 2009, the country`s total coffee exports to China reached US$2.3 million.

Deputy Finance Minister Bayu Krisnamurthi said that Indonesia was aiming at young Chinese coffee consumers whose market share was expected to reach 350 million people.


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