Coffe Commodity In Indonesia Affected by El nino

Coffee production in Indonesia is estimated to be down 20 percent in the next year with a record of the strongest El Nino strongest attack in nearly two decades that damage crops in the country of the manufacturer of the third-largest robusta coffee beans in this world.

Harvest is estimated to fall to 560,000 metric tons in the year that began April 1 of 700,000 tons this year, according to the median estimate of six traders and analysts compiled by Bloomberg.This result would be the sharpest decrease since the season 2006-07, according to Department of agriculture data.

With smaller Indonesia plants would potentially widen the deficit in global coffee beans used bycompanies including those used by Nestle SA, and price support slumped 20 percent last year.Most of the causes of El Nino drought in the fourth quarter 2015 in Indonesia, according toRabobank International. This kind of weather has also hindered the cocoa crop in Ivory Coast,monsoon in India hold and force the Philippines to import more rice.

"Drought in Indonesia is due to El Nino," according to Carlos Mera Arzeno, commodity analystat Rabobank in London.

Arzeno predicted a decline of 20 percent in Indonesia harvest 600,000 tons next season and said "we do not rule out a larger decrease in production."

The price of Robusta coffee in ICE Futures Europe down 1.5 per cent to $ 1416 per ton on Monday. The market for robusta beans will face a shortage of 100,000 bags of 60 kilos each in the 2015-16 season which started in October in most of the country after a surplus of 800,000 bags a year earlier, according to the Switzerland trader Volcafe, a unit of the commodity traders E.D. & F Man Holdings Ltd.

While production at higher ground in Indonesia are not too affected by the drought, wheredrought ruining crops and destroyed the harvest in some lowland areas in Sumatra and Java,including in Lampung, said Hutama Sugandhi, Chairman of the Indonesia Coffee Exporters 'Association.

The province of Lampung, Bengkulu and South Sumatra is Indonesia's main robusta area,produces about 75 percent of the country's production. Coffee beans from the region were shipped from the port Length in Lampung. While the Arabica coffee is grown mostly in North Sumatra and Java, and accounted for 16 percent of the total harvest in 2014-15, USDA datashow.

Domestic yields are declining may encourage Indonesia to increase imports, said SusiloMoelyono, Manager of marketing and purchase of PT Delta Park Indonesia, Semarang, Central Java. Imports seen between 60000 and 90000 ton this calendar year of around 40000 tons last year, he said.