Coffee

World Coffee Market

Global Production and Consumption of Coffee

Coffee that is sold on the world market is usually a combination of roasted beans of two botanic types: arabica and robusta. The difference between these two types mainly lies in its taste and the level of caffeine. Arabica beans, more expensive on the world market, have a milder taste and contain less caffeine than their robusta counterparts.

The subtropical and equatorial regions provide good conditions for coffee to be grown. Therefore, countries that dominate the world's coffee production are found in South America, Africa, and Southeast Asia.

Coffee is a traded commodity on major futures and commodity exchanges, most importantly in London (United Kingdom) and New York (United States).

Below, are two tables that list the world's biggest coffee producing countries, both for arabica and robusta. What we see is that Indonesia ranks among the world's biggest arabica bean producers (albeit just outside of the top ten), and is the world's third-biggest robusta bean producer.

World's Top Arabica Coffee Bean Producing Countries in 2023:
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Country	Production (in bags of 60 kg)
1. Brazil	44,700,000
2. Colombia	11,600,000
3. Ethiopia	8,350,000
4. Honduras	5,500,000
5. Peru	4,200,000
6. Mexico	3,545,000
7. Guatemala	3,305,000
8. Nicaragua	2,500,000
9. China	1,800,000
11. Indonesia	1,300,000

^{Source: Index Mundi}

World's Top Robusta Coffee Bean Producing Countries in 2023:
_{(Layout of the table might be distorted on small screens)}

Country	Production (in bags of 60 kg)
1. Vietnam	30,230,000
2. Brazil	21,700,000
3. Indonesia	8,400,000
4. Uganda	5,850,000
5. India	4,580,000
6. Malaysia	1,500,000
7. Ivory Coast	1,350,000
8. Thailand	750,000
9. Tanzania	600,000
10. Mexico	545,000

^{Source: Index Mundi}

Meanwhile, Brazil is clearly the biggest force on the global coffee stage. It is already the world's biggest arabica bean producer but based on recent reports, its robusta output will grow significantly in the years to come due to improved farming techniques. Various analysts in fact expect Brazil to overtake Vietnam as the biggest robusta bean producer at some point in the future.

Global coffee consumption continues to rise (although the COVID-19 crisis in 2020-2021 disrupted this trend temporarily) due to the expanding world population and growing 'coffee consumption lifestyles' in populous countries like China and Indonesia where the rapidly rising middle classes increasingly like to visit the mushrooming coffee shops (including international chains, such as Starbucks) for a cup of coffee. It is noteworthy that coffee consumption is particularly rising in Asia. And another recent trend is that Asian demand is gradually shifting from robusta to the higher-quality arabica beans as per capita GDP is rising rapidly.

The table below shows that there has mostly been a coffee bean deficit in the world over the past couple of years as global consumption exceeds global production. The data for the 2023-2024 coffee season are based on an estimate by the International Coffee Organization (ICO). One key reason why coffee production in key supplying countries Brazil and Vietnam have been undermined in recent years is adverse weather conditions (meanwhile in Vietnam many coffee farmers reportedly switch to durian farming as demand for this fruit is rising rapidly in China).

Summary of the World Coffee Market (in million 60-kg bags):

	2018/19	2019/20	2020/21	2021/22	2022/23	2023/24
Production	169.8	168.4	170.8	168.0	168.2	178.0*
Consumption	171.2	168.6	169.9	176.6	173.1	177.0*
Balance	-1.3	-0.2	0.9	-8.6	-4.9	1.0*

^{* Projection by the International Coffee Organization (ICO)
Source: International Coffee Organization (ICO)}

Coffee in Indonesia

Domestic Production, Export and Consumption of Indonesian Coffee

Indonesia is among the world's top coffee producing and exporting countries. Most of its coffee bean production - between 80 and 90 percent - involves the lower quality robusta coffee type (which thrives at lower altitudes). Indonesia is also famous for having a number of specialty coffees such as 'kopi luwak' (known as world's the most expensive coffee) and 'kopi Mandailing' (see below).

In terms of agricultural commodities, coffee is typically Indonesia's fourth-largest foreign exchange earner (after palm oil, rubber and cocoa). And so, coffee plays an important role in the economy of Indonesia. It delivers foreign exchange earnings, provides income to more than one million Indonesian coffee farmers, and delivers raw materials to the industrial sector.

Meanwhile, in terms of consumption, we have seen strong growth of domestic coffee consumption in Indonesia as people increasingly adopt coffee into their lifestyles. Moreover, we have seen the mushrooming of coffee places or cafes in Indonesian cities (including international brands such as Starbucks and The Coffee Bean & Tea Leaf).

Coffee was introduced to the archipelago by the Dutch who initially planted coffee trees around their stronghold of Batavia but quickly expanded coffee production to the Bogor and Sukabumi regions in West Java in the 17th and 18th century. Indonesia proved to have a near ideal climate for coffee production (particularly the area near the equator), and so big plantations were soon established on other parts of Java and on the islands of Sumatra and Sulawesi. Today, you can also find coffee plantations on other islands, like Bali, Flores and even in Papua.

Indonesia's coffee plantations cover a total area of approximately 1.27 million hectares (at end 2023). Based on data from 2019, there were 933 hectares of robusta plantations and 307 hectares of arabica plantations across the country. Most coffee plantations can be found on the island of Sumatra. The table below shows that the top five provinces with biggest coffee plantation sizes are all found on Sumatra. Meanwhile, the highlands of Aceh and North Sumatra are particularly great for arabica plantations.

Indonesian Provinces with Biggest Coffee Plantation Sizes and Production in 2023:
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Province	Coffee Plantation Size (in hectares)	Coffee Bean Production (in tons)
1. South Sumatra	267,200	198,000
2. Lampung	155,200	108,100
3. Aceh	114,000	71,100
4. North Sumatra	98,600	87,900
5. Bengkulu	91,200	55,000
Indonesia	1,268,900	760,200

^{Source: Badan Pusat Statistik (BPS)}

It is interesting that smallholder farmers control 98 percent of total coffee plantations in Indonesia (and they even account for 99 percent of national coffee bean production). Meanwhile, the big government-owned or privately-held coffee plantations play an insignificant role (contrary to a country like Vietnam). This is actually among the key reasons why Indonesia has difficulty to show a stable supply (including stable quality) of coffee beans, each year. Moreover, smallholders typically lack the best farming techniques while also having less money at their disposal to invest in the plantation (such as tree rejuvenation or the best fertilizers). As such, Indonesia misses out on competitiveness on the global market.

Over the past 20 years the total size of coffee plantations has declined, although not that drastically, from 1.30 million hectares in 2004 to 1.27 million hectares in 2023. Interestingly enough, it are particularly the big privately-held and government-owned coffee plantations that have been closed over the past two decades (some have been turned into palm oil plantations, especially around 2007-2008).

When we take a look at national coffee production, then Indonesia has been showing a small but stable increase in production of coffee (which essentially started in the 1960s).

Indonesian Coffee Production & Export:

	2020	2021	2022	2023	2024	2025
Production (in 1,000 tons)	762.4	786.2	775.0	760.2*
Export (in 1,000 tons)	379.3	387.3	437.5	n/a
Export (in million USD)	821.9	858.5	1,148.4	n/a

^{* Preliminary data}

	2014	2015	2016	2017	2018	2019
Production (in 1,000 tons)	643.8	639.3	663.9	716.1	756.0	752.5
Export (in 1,000 tons)	384.8	502.0	414.6	467.8	280.0	359.0
Export (in million USD)	1,039.3	1,197.7	1,008.5	1,187.1	815.9	883.1

 

	2008	2009	2010	2011	2012	2013
Production (in 1,000 tons)	698.0	682.7	686.9	638.6	691.2	675.9
Export (in 1,000 tons)	468.7	433.6	433.6	346.5	448.6	534.0
Export (in million USD)	991.4	814.3	814.3	1,036.7	1,249.5	1,174.0

^{Source: Badan Pusat Statistik (BPS)}

Around 60 percent of coffee production in Indonesia is exported to overseas markets. The biggest export markets for Indonesian coffee products are the United States, India, Egypt, Germany and Malaysia. The two top products that are exported by Indonesia are (1) unroasted, not-decaffeinated robusta beans and (2) unroasted, not-decaffeinated arabica beans. And as can be expected, the raw robusta beans are completely dominant in terms of exports as Indonesia exports nearly eight times more robusta beans than arabica beans (volume-wise). Exports of processed coffee are only a small fraction of total Indonesian coffee exports.

As mentioned above, coffee consumption is rising rapidly in Indonesia amid the growing population, the expanding middle class (rising purchasing power),  changing lifestyles, and the mushrooming of cafes (coffee shops) in the urban environments of Indonesia.

Domestic Coffee Consumption in Indonesia:

	2015/16	2016/17	2017/18	2018/19	2019/20
Coffee Consumption (in 1,000 60 kg bags)	4,550	4,650	4,750	4,800	4,806

 

	2010/11	2011/12	2012/13	2013/14	2014/15
Coffee Consumption (in 1,000 60 kg bags)	3,333	3,667	3,900	4,250	4,417

 

	2005/06	2006/07	2007/08	2008/09	2009/10
Coffee Consumption (in 1,000 60 kg bags)	2,500	2,833	3,333	3,333	3,333

 

	2000/01	2001/02	2002/03	2003/04	2004/05
Coffee Consumption (in 1,000 60 kg bags)	1,676	2,000	1,779	1,833	2,000

^{Source: Statista}

Indonesian Specialty Coffees

Besides the production of regular coffee, Indonesia also produces a number of specialty coffees. Most famous of these specialties is luwak coffee (kopi luwak). This coffee is is known as the world's most expensive coffee. It is brewed from beans that have passed through the digestive system of the Asian palm civet (catlike animal). Due to the special fermentation process inside the animal (and due to the fact that the civet is able to select the juiciest coffee cherries) this coffee is believed to have a richer taste. Its labor-intensive production process and scarcity on the international market cause its expensive price.

Most Well-Known Indonesian Arabica & Robusta Coffees

As mentioned above, Sumatra and Java are the top coffee supplying islands of Indonesia. On these two islands you can find many types of coffee, all with different flavours and nuances. Below, we list the most famous Indonesian coffees originating from the islands of Sumatra, Java, Bali and Sulawesi.

Sumatran Coffees:

Coffee	Type	Taste
Aceh Gayo	Arabica/Robusta	Brown Sugar, Dark Chocolate, Sweet, Orange Zest/Citrus
Sidikalang	Robusta	Nutty, Milk Chocolate, Caramel, Low Acidity, Bold
Mandailing	Arabica	Sweet Caramel, Spices, Hint Of Dark Chocolate
Semendo	Arabica	Tropical Fruit, Brown Sugar, Sweetness Long
Kerinci	Arabica	Floral, Malty Sweetnees, Grape Acidity
Lintong	Arabica	Dark Chocolate, Caramel, Orange Hint, Nutmeg
Lampung	Robusta	Chocolate, Brown Sugar, Woody, Sweet, Earthy

Javanese Coffees:

Coffee	Type	Taste
Java Preanger	Arabica/Robusta	Orange Zest/Citrus, Brown Sugar
Ciwidey	Arabica/Robusta	Floral, Vanilla, Brown Sugar, Cherry, Sweet Aftertaste
Temanggung	Robusta	Earthy, Caramel, Woody
Jampit	Arabica/Robusta	Sweet Caramelized Sugar Aroma, Full Heavy Body, Dark Chocolate
Ijen	Arabica	Floral, Malty Sweetness, Grape Acidity

Balinese Coffees:

Coffee	Type	Taste
Kintamani	Arabica/Robusta	Chocolate, Nutty, Fruity, Lemon Hint
Tambora	Robusta	Caramel, Chocolate, Nutty
Pupuan	Robusta	Chocolate, Caramel, Salty

Sulawesi Coffees:

Coffee	Type	Taste
Toraja	Arabica/Robusta	Brown Sugar, Chocolate, Milky, Chocolate Malt, Sweet, Berry
Pinogu	Robusta	Chocolate, Lemon, Spicy

Future Prospects of Indonesian Coffee

As global (and domestic) consumption of coffee continues to increase, prospects of the coffee industry are positive. Moreover, the Indonesian government has been engaged in various programs that improve the coffee eco-system, from upstream to downstream which has helped to raise productivity at the coffee plantations. Considering Indonesia's upstream coffee industry is dominated by smallholders Indonesia has been plagued with structurally weak productivity. Based on 2021 data from BPS, Indonesia’s coffee productivity was recorded at 817 kilogram (kg) per hectare (ha). In Asian countries like China, Malaysia or Vietnam the coffee productivity rate is about four to five times higher than in Indonesia. And so, there is much to gain if Indonesia can improve its coffee productivity rate further.

[Last updated on 23 May 2024]

For a more in-depth analysis of Indonesia's (upstream) coffee industry we refer readers to our latest Coffee Industry report (link below).

Buy our latest Indonesian Coffee Industry Report here (PDF, 31 pages)