It is important for Indonesia to boost tea production because for more than a decade there has been a downward trend. After touching a record high tea production figure of 169,821 tons in 2003 Indonesian tea production has been sliding ever since. In the 2008-2013 period Indonesia still managed to produce more than 150,000 tons tea per annum. However, currently the production figure has trouble to reach beyond 140,000 tons per year.
Key reason for this decline in tea production is the falling size of Indonesia's tea plantations. While in 2000 Indonesia's total tea plantation size was estimated at 153,675 hectares (ha), the size has fallen nearly 26 percent to 113,808 ha in 2018. Amid the generally falling tea price (due to rising competition on the international market), rising production costs, ageing tea trees, tougher import regulations in certain countries, and a rise in tea imports part of Indonesian tea farmers have turned to other (higher-yielding) crops such as palm oil, rubber, and vegetables. Going forward, the size of Indonesian tea plantations is expected to decline further.
However, despite the declining plantation size, authorities hope to stabilize (and perhaps even slightly increase) the nation's tea output. This will need to be realized through an increase in productivity at the existing plantations. Planting superior seeds, encouraging tea farmers to use good agriculture practices, and planting treas at empty spots to make more efficient use of existing plantations are the main strategies. Currently, Indonesia's average tea production stands at one ton per hectare. Authorities aim to double this figure to two tons per hectare in the future. However, it will require synergy between all stakeholders.
Bambang Murtioso, General Chairman of the Indonesian Tea Council, is a bit pessimistic about Indonesia's tea sector in the next five years as he expects declining production, exports, and domestic consumption, while imports are expected to rise. However, all changes over the next couple of years are estimated to be very modest, thus not as bad as in the past ten years.
Regarding the falling size of Indonesia's tea plantations, Murtioso says it are particularly the big state-owned tea plantations that have fallen in size. As these plantations had become loss-making plantations they shifted to other commodities (while part of land has also been used for infrastructure projects). Considering these big state-owned plantations account for around 40 percent of Indonesia's total tea production, it is immediately felt (in nationwide production figures) when the size of these plantations shrink.
Murtioso added that tea is currently not included in Indonesia's top 10 strategic agricultural commodities (a list that is compiled by the Agriculture Ministry). This is probably due to the relatively small significance of tea exports (as well as the fact that tea exports have been gradually sliding).
Government Outlook Indonesia's Tea Production, Export, Import & Consumption:
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Biggest Export Markets Indonesian Tea:
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