Gourmet Coffee Sales From Indonesia Grow

WASHINGTON - Nov 28/06 - SNS -- Indonesia is enjoying solid growth in demand for its Arabica coffee beans, especially gourmet types, reports the U.S. agricultural attache for the country.

"Particularly, demand for the Mandailing type of Arabica beans is strong due to its uniqueness of taste and aroma," the agricultural attache said.

Gourmet Arabica beans account for 7% of Arabica bean exports. The increased demand for Arabica beans has changed the makeup of Indonesian coffee bean exports. The percentage of Robusta has dropped from 90% to less than 80%, whereas Arabica has increased to almost 30%.

As the number of food and beverage outlets in Indonesia continues to expand, the consumption of coffee increases. Particularly, donut and coffee shops contribute to the increase in consumption. For example, just this year Krispy Kreme opened a few outlets in Jakarta. To meet the increase in local demand, there will be a slight increase in imports for blending purposes and a decrease in roast ground exports.

In October 01, 2005 Indonesian government has announced the intention to eliminate 10% VAT for many agricultural products, including coffee. However, Indonesian government has yet to issue a decree that would remove the tax.

Indonesian coffee production has suffered from a delay of the rainy season. Though the area planted increased during marketing year 2006-2007, the harvest was late, impacting yield per hectare. High international coffee prices will encourage coffee bean exporters to pull more beans out of stocks.

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