From the Field, News
Monday, November 1, 2021
Indonesia Harvest Update 2021
Prices for Indonesian coffees will be higher this year, reports Daniel Shewmaker, Managing Director Sucafina Indonesia and Timor-Leste. “Last year prices were at a 10-year low as a result of reduced demand due to Coronavirus lockdowns,” Daniel says. This year, we’ve seen demand rebound, but the harvest size is expected to be 20-30% smaller than last year, leading to shortages.
“Low prices last year caused a portion of farmers to pull up their coffee and switch to other crops,” Daniel says. At the same time, La Niña in 2020 affected flowering for the 2021 crop and as a result, overall production is significantly down across Indonesia. The La Niña event also brought significant rain and less sunshine, prolonging drying times.
While price volatility also makes it difficult to forward contract and purchase coffee at origin, it’s not all doom and gloom, Daniel says. Sucafina Indonesia has been able to organize new farmer groups and expand their supply chains into West Java, where higher coffee prices are encouraging producers to focus on specialty production. “We’re implementing Farmer Connect traceability in Java and Sumatra this year, and we aim to expand this connectivity into Flores and Sulawesi in 2022,” Daniel says.
Another positive outcome from higher prices is that farmers have been reinvesting in their crops. “Our specialty partners have been using their profits to expand processing infrastructure and build additional drying domes,” Daniel says.
The Sumatra harvest is late and will peak through November and December this year. Preshipment samples will begin shipping around December, January and February and coffee is projected to begin arriving March to June. We expect to see higher freight rates this year at 5 to 10 times pre-pandemic levels. For pricing, availability, and forward booking, contact your trader.