Indonesia Coffee Report: Production Predicted to Drop 8% in 2026/27

Key Takeaways

• Production falls 8% to 11.38 million bags in 2026/27.
• Robustas drop to 10 million bags; arabica to 1.38 million.
• Exports projected down 11% to 7 million bags.
• Domestic consumption rises slightly to 4.83 million bags.
• Flood damage may delay arabica recovery for 2‑3 years.

Pulse Analysis

Indonesia remains the world’s second‑largest coffee producer, but climate volatility is now eroding that advantage. The USDA’s latest forecast attributes an 8% output decline to unusually heavy rains that disrupted flowering in key robusta zones of southern Sumatra and Central Java. While the coffee‑growing area stays flat at roughly 1.2 million hectares, the lack of replanting programs means the sector cannot quickly offset weather‑related losses, especially for arabica farms still recovering from 2025 floods.

Globally, the contraction in Indonesian green beans tightens supply for Europe and the United States, the two biggest import markets. Europe’s demand surged in 2025/26, but the projected 11% export dip could curb that momentum, potentially lifting spot prices and prompting buyers to diversify sources toward Brazil or Vietnam. Higher green‑bean costs also squeeze roaster margins, nudging some consumers toward lower‑grade blends and ready‑to‑drink formats, a trend already evident in Indonesia’s domestic market.

For Indonesian roasters and processors, the outlook calls for strategic adjustments. Steady domestic consumption—forecast at 4.83 million bags—offers a buffer, yet rising input costs may accelerate shifts toward cost‑effective robusta blends. Investment in resilient farming practices, such as drought‑tolerant varieties and improved drainage, could mitigate future climate shocks. Meanwhile, exporters may need to reinforce logistics to offset lingering infrastructure bottlenecks from flood‑damaged roads and bridges, ensuring Indonesia retains its competitive edge in the global coffee trade.