Indonesia Advisory

World Bank investment arm the International Finance Corporation (IFC) is to invest $20 million in setting up coffee farmer training centers in North Sumatra, Banda Aceh, Lampung and Bali over the next four years to enable farmers to produce coffee of international standards, an IFC executive said.

Antara reported that the investment would be made through an IFC subsidiary, Indo Cafco Indonesia Ltd., a member of ECOM Agroindustrial Corporation Ltd. based in Switzerland which is engaged in commodity supplies. Indo Cafco, a local unit of Swedish trading company ECOM Agroindustrial Corporation, is the supplier to Starbucks and Nestle’s Nespresso.

"About 4,500 farmers will get training to improve the quality and increase the quantity of their coffee production. After the training, they will receive certificates that will enable them to get premium prices for the coffee they produce," IFC vice president Rachel Kyte said on Wednesday.

Kyte also said the company has an internal system that would ensure the farmers' coffee cultivation activities would not happen at the expense of forests.

ECOM managing director Andrew Falconer said the targeted premium price of this program was 7%-10% of the market price. He added that the company managed approximately 3,500 hectares of coffee plantations at present.

Falconer explained that global demand seemed to show no decline from the impact of the economic slowdown but there was a difference in the quality of coffee which was consumed.
"Indonesia is still a large market with 150,000 tons of coffee demand per year, India with 80,000 tons and China 20,000 tons. These countries still indicate rising demand," he said.