RI'S COFFEE EXPORTS TO CHINA DECLINING

By Andi Abdussalam

Jakarta, July 17 (ANTARA) - Indonesia, one of the world's  coffee producers, is launching a promotional campaign in the world largest market China, amid predictions that its exports to that country are declining this year.          Aiming at Chinese youth consumers, Indonesia this week was taking part in the Shanghai World Expo 2010, where, during the promotion event, it organized a drink coffee ritual program to attract Chinese consumers.          It was part of its promotion efforts to increase exports to that country by among other things opening a special coffee outlet at the Indonesian Pavilion.          "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 in a thanksgiving party held in connection with the achievement of the Indonesian pavilion at the World Expo 2010.          While promotion is being held overseas, Indonesia's coffee production is actually declining at home due to various reasons. This year its coffee exports to China were predicted to drop.          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 was 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.          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.          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.          "The demand for coffee of this group reaches 17 percent of China's overall annual demand for coffee," Bayu Krisnamurthi said on the sidelines of his visit to the Indonesian Coffee Exhibition in Shanghai World Expo, Shanghai, China, said.          The deputy minister was leading an Indonesian delegation to the Chinese expo with members consisting of 20 national coffee producing companies and members of the Indonesian Coffee Exporters Association (AEKI).          The Indonesian coffee promotion delegation includes representatives from the Association of Indonesian Coffee Exporters and 20 coffee producers. Four of the world's ten best coffee products, recognized by the world's coffee associations are from Indonesia, namely coffee from Toraja, Gayo, Mandailing and East Java.          Krisnamurthi said that given the good coffee marketing prospects in China, Indonesia's exports of the commodity to that country may reach 50,000 tons a year.          "Chinese consumers enjoy Indonesian coffee very much," he said through a short text message from Shanghai to ANTARA on Friday. He said Chinese consumers like exotic coffee products such as those from Toraja and Manado.          Even though Indonesia's coffee exports are predicted to drop this year, hopefully, its overall exports to that country will grow.          Hatta Rajasa said Indonesia's exports to China would continue to grow although that country's economic growth was declining. "China will continue to need enormous amounts of energy. Our exports will continue to increase though there is a slowing-down process there," the minister said on Friday.          He said Indonesia's export commodities to China were commodities in which other countries could not easily compete with Indonesia. Statistical data indicated that China's economic growth in the first quarter of 2010 was recorded at 11.9 percent but in the second quarter it dropped to 10.3 percent.          The slowing down in economic growth was believed to be intentionally designed by the Chinese government in an effort to avoid the overheating of the economy.          Hatta said Indonesia would continue its efforts to maintain its surplus in its balance of trade with China. "In the near future an Indonesian team will be leaving for China to discuss the balance of trade. We should not suffer a deficit in our balance of trade with China," the chief economic minister said.          He said that Indonesia's trade value with China at present reached US$30 billion.          "I am optimistic that in 2014 the trade value will reach US$50 billion with a maintained balance of payments," Hatta Rajasa said.***2*** (T.A014/ H-NG/f001 )17-07-2010 10:37: