Issue link: https://read.dmtmag.com/i/491359
54 STiR tea & coffee industry international Growth projections are encouraging: Coffee consumption in Indo- nesia is expected to rise about 20% a year due to population growth, ex- pansion of the middle class; growing economic and political stability, as well as the rising number of specialty coffee outlets, cafes, shops, and franchises coming on line. Rising demand may lift all cups, arabica as well as robusta. Other sectors with growth potential are hotels, grocery, catering, val- ue-added products, coffee processing, branding, packaging and marketing. The cafe business in Indonesia took off in the early 2000s, when new concept coffee cafés "environments" selling specialty coffee drinks and roasted beans took their place beside more traditional cafes and restau- rants. About 10-15% of Indonesia's coffee consumption now moves through cafes. Sales are expected to increase 8% per year. New franchise rules Growing opportunities in retail franchising should be open to Indonesian small and medium-sized businesses (SMEs), in addition to larger global players. In February of 2013, the government issued new franchising rules stipulating that foreign franchisers are limited to 250 in-country units. To go beyond that number, additional units must be 40% jointly-owned by Indonesians and 80% of raw materials and machinery must be manufac- tured and sourced locally. Twin challenges In the 1970s, improvements in palm oil processing hastened adoption of the product by the fast food and baking industries. Oil palm went from small bananas to a boom crop. Between 1967 and 1997, palm oil produc- tion increased 2,000%, and Indonesia became the world's largest palm oil exporter, producing 50% of the global supply. Huge corporate plantations began to replace small, family-owned oil palm farms. In 2013, palm oil production reached 28 million tons and accounted for 11% of the nation's export income. The government projects a figure of 40 million tons by 2020, unless it applies the brakes. Why would it want to regulate this industry? To create massive oil palm plantations one must inevitably destroy forests and animal habitat. Monoculture depletes once fertile soils and aquifers. Fires used to clear forests can create air pollution. Particulate haze can be swept toward other countries, causing serious health problems, as happened in 1997 and 2013. It was recently revealed that palm oil and coffee plantations have en- croached on the last remaining habitats of the last remaining Sumatran orangutans and tigers. The Indonesian government issued a moratorium on new forest con- cessions from 2011 to 2015, as well as limiting plantation size for 11 ag- ricultural commodities, including rubber, palm oil, coffee, tea, cocoa and cashew nuts. Does the oil palm threaten coffee? Yes: if not directly, certainly indi- rectly as a devourer of natural and manmade resources. In 1995, petro- leum was Indonesia's top foreign exchange earner ($5.51 billion). Coffee was ninth at $596 million, followed, in last place, by palm oil at $590 mil- lion. By 2010, coffee had fallen to 29th place ($845.5 million), while palm oil had risen to fourth place ($7.67 billion), one step below petroleum. Coffee production held steady, thanks to market and productivity growth, but one should seriously study the trend for it foretells gross changes in future land use and resource allocation. Climate change That the earth's climate is changing is certain. It is with us, if not exactly for us. Changes are occurring in the world's oceans: currents, acidity levels, species health and sea levels. This is not good news for Indonesia with Indonesia's Coffee-growing Regions Sumatra/ Aceh Northern Sumatra produces 15% of Indonesia's coffee. Mandheling, north-central Sumatra, is a name borrowed from the local Mandailing people of Lake Toba. This wet-hulled coffee is cultivated by smallholders. Sumatra Lingtong grows on a high plateau southwest of Lake Toba. Sumatra Sidikilang is populated by the Batak ethnic group. A regional coffee might be named from the local bean collection point, such as the town of Nihota. Gayo mountain coffee is grown near Lake Tawar in north- west Sumatra, between Lake Toba and Banda Aceh. It is named for the Gayo people. Robusta is grown at Lampung at the southern tip of Suma- tra. The most recent arabica plantations are in Mangkuraja, Bengkulu Province. West Java and East Java The early Dutch growing areas in west Java are at Sukibumi and Sumedang, in historic Priangan region south of Jakarta. The Paniis coffee planters' co-operative in Sumedang produces 15 tons including 2.5 tons of kopi luwak ("cat poop coffee"). Indonesian black tea, is grown at Cikajang, West Java and in western Sumatra. Java's newer arabica estates are located on the Ijen plateau at the eastern tip of the island near Banyuwangi. Five government-owned coffee estates are: Blawan, Jampit, Pancur, Kayumas and Tugosari. Bali Coffee was established in Bali, at Kintamani, by Lombok traders at the beginning of the 20th Century. Most is robus- ta, but wet processed arabica is also prevalent. Geographic Indication (GI) was granted to Bali Kintamani in 2009. Flores This relatively small island east of Bali produces unique, organic, wet-processed coffee. Sulawesi (Celebes) Ninety-five percent of Suluwesi is wet-hulled on small-hold- ings, grown principally at Tana Toraja, a mountainous area in southern Sulawesi peninsula, south of Tolondokalondo volcano, the center of the ancient Toraja culture. The town of Kalosi, south of Toraja, is the regional collection point. There has been legal wrangling over trademark rights to the name "Toraja" and it is not yet legally registered. Papua/West Papua (Island of New Guinea) The eastern-most provinces of Indonesia, formerly Irian Jaya, share the world's biggest island with Papua New Guinea. The island is occupied by tribes whose unbroken history (ending in 1961) goes back millions of years to the Stone Age without contact of any kind with outside civiliza- tion.Two main growing areas are the Baliem Valley, near the town of Wamena and Kamu Valley, near Moanemani. They produce 230 tons of shade grown, wet-hulled coffee. KSUBA, a regional co-op, helped farmers there obtain organic and fair trade certification. The area is not acces- sible by road.