I. Executive Summary: Strategic Findings and 2025/2026 Outlook

The Indonesian green coffee export sector is positioned for moderate growth in the 2025/2026 market year, though operations are subject to intense geopolitical and regulatory pressures. Total production for the 2025/26 season is projected to reach 11.3 million 60-kilogram bags, marking a 5% increase over the previous year. Export volumes are similarly forecast to rise by 7%, reaching 6.5 million bags.¹ The United States remains the primary destination market for Indonesian green beans.¹

However, this growth trajectory is overshadowed by two major external factors: escalating regulatory compliance requirements in the European Union (EU) and persistent global logistical volatility. Large companies importing coffee into the EU must meet the strict geolocation requirements of the EU Deforestation Regulation (EUDR) by December 30, 2025.⁴ Concurrently, the continuation of the Red Sea crisis into mid-2025 necessitates lengthy rerouting around the Cape of Good Hope, adding significant time and cost to Asia-Europe freight lanes and increasing quality risks during transit.⁵ These factors collectively mandate a rapid shift toward high-compliance logistics and premium quality preservation methods for all Indonesian green coffee exporters seeking to compete in major international markets.

II. Indonesian Coffee Production and Export Market Fundamentals

2.1. Production Overview: Arabica vs. Robusta Distribution and Volume (2025/26)

Indonesia’s coffee production forecast for the 2025/26 marketing year reflects resilience, with expected output reaching 11.3 million bags, an increase driven by improved yields resulting from favorable weather patterns and increased agricultural inputs.¹

The market remains structurally dominated by the Robusta variety, which accounts for approximately 80 to 90 percent of Indonesia’s total coffee output. Production of Robusta is concentrated in the Southern region of Sumatra, encompassing the provinces of Lampung, South Sumatra, and Bengkulu.¹ In contrast, Arabica production is centered primarily in Northern Sumatra, with smaller, high-altitude production zones located across Java, Sulawesi, and Papua.¹

Crucially, the agricultural structure is characterized by a high degree of smallholder participation. Smallholder plantations, typically averaging between 1 and 2 hectares, account for a commanding 98 percent of the total national crop area.¹ This reliance on a highly fragmented smallholder structure creates unique compliance and logistical challenges for exporters aiming to meet stringent international requirements.

2.2. Critical Export Ports and Regional Specialization

The logistical arteries for Indonesian coffee exports are geographically specialized based on the dominant coffee type. Belawan Port in Sumatra is recognized as the essential gateway for high-value Arabica coffee originating from Northern Sumatra.⁶ The port has benefited from significant infrastructure investments, including modern container terminals and advanced cargo handling equipment, which are necessary to ensure the freshness and quality of these premium exports are maintained during loading.⁷ Meanwhile, Tanjung Perak Port in East Java serves as the primary hub for Robusta coffee shipments originating from Java and Eastern Indonesia.⁶

This clear division of logistics hubs based on regional specialization indicates distinct logistical risk and pricing structures across the Indonesian coffee trade. Any major disruption or congestion specifically affecting Belawan, whether due to adverse North Sumatran weather events or infrastructure strain, could disproportionately impact global Arabica prices. Since Arabica constitutes a smaller segment (10–20%) of Indonesia’s total production ¹, its more centralized supply chain offers less buffer capacity, potentially leading to higher price volatility compared to the more geographically resilient Robusta supply, which is dispersed across multiple producing regions and ports.

Despite the modernization of major ports like Belawan, the logistics operations preceding port arrival present a significant challenge. Transportation access from remote, often high-altitude, coffee-producing regions to these centralized warehouses and ports is frequently suboptimal, particularly for Micro, Small, and Medium Enterprises (MSMEs).¹ This structural infrastructure bottleneck introduces inherent initial quality risks, such as increased moisture content or physical damage, during the initial transit phase. This means that even the most rigorous port preparation and container management practices may struggle to salvage beans that have already suffered degradation during poor internal transport conditions.

2.3. Market Destination Analysis and Demand Shifts

The market analysis forecasts that the United States will sustain its position as the largest single destination market for Indonesian green bean exports.¹ Conversely, the European market is undergoing a fundamental transformation driven by stringent regulatory compliance. Demand from Europe will increasingly be conditional on adherence to the EUDR mandate, effective from the fourth quarter of 2025.⁴

Beyond governmental regulation, international buyers frequently impose additional requirements, mandating certifications such as organic, fair trade, or comprehensive traceability protocols. Exporters must actively invest in certification and product testing capabilities to satisfy these sophisticated market demands.⁹ The necessity for traceability and certification underscores a growing trend toward highly selective procurement based not just on quality, but on ethical and environmental credentials.

III. Regulatory Compliance and Export Documentation

3.1. Indonesian Export Approval Procedures

Coffee is designated as a regulated export commodity in Indonesia, governed by successive Ministerial Regulations, with the latest framework established under the Regulation of the Minister of Trade No. 41/M-DAG/PER/9/2009, and subsequently amended.¹⁰ Compliance begins with obtaining the

SPEK (Surat Persetujuan Ekspor Kopi), which is the mandatory Letter of Approval for the Export of Coffee. This document is issued by the relevant Provincial, Regency, or City Trade Office and must be secured for shipping from any export port within Indonesia.¹⁰ Furthermore, the exported coffee must demonstrably conform to quality standards formally established by the Minister of Trade.¹⁰

3.2. Essential Export Documentation Checklist

The accurate and timely preparation of export documentation is critical for customs clearance, facilitating secure financial transactions (such as Letters of Credit), and ensuring overall supply chain integrity.⁹ The essential documents include commercial paperwork (Invoice and Packing List), shipping documents (Bill of Lading), proof of origin (COO), and official approvals (Phytosanitary Certificate and SPEK). The Packing List, in particular, must be detailed, including itemized descriptions, quantities, and the corresponding HS codes, as it is utilized by customs authorities for verification.¹²

The Certificate of Origin (COO), obtained from the Indonesian Chamber of Commerce and Industry (KADIN), serves the primary function of verifying the product’s country of origin for customs calculation.¹³ This document has a direct and quantifiable economic impact: if Indonesia has a Free Trade Agreement (FTA) with the destination country, a preferential COO enables the importer to claim reduced customs duties and tariffs. This crucial financial benefit positions the correct and timely issuance of the COO (such as the SKA Form ICO, used to prove Indonesian origin ¹⁰) as a strategic element of competitive pricing and profit margin maximization for the importing client.¹³

For agricultural exports like green coffee, a Phytosanitary Certificate is mandatory, issued by Indonesia’s quarantine agency, confirming the beans are free from pests or diseases.¹⁴ Additionally, some destination markets, such as the EU, may require an International Coffee Organization (ICO) Certificate.¹⁴

Key Export Documentation Checklist

Document Name	Issuing Authority/Source	Purpose in Export Procedure
Commercial Invoice & Packing List	Exporter/Shipper	Valuation, item description, content verification for customs 12
Bill of Lading (B/L) or Air Waybill (AWB)	Carrier/Freight Forwarder	Contract of carriage and confirmation of ownership/delivery terms 14
Certificate of Origin (COO)	Indonesian Chamber of Commerce (KADIN)	Verifies product origin for customs clearance and tariff calculation 13
Phytosanitary Certificate	Indonesian Quarantine Agency	Certifies the coffee is free from pests or diseases 14
SPEK (Surat Persetujuan Ekspor Kopi)	Provincial Trade Office	Mandatory Indonesian Letter of Approval for Coffee Export 10
ICO Certificate	Designated Issuing Body	Required by specific destination countries (e.g., EU) for tracking/quotas 10

3.3. HS Code Protocol for Green Bean Coffee

Indonesian coffee exports are codified primarily under the Harmonized System (HS) Customs Tariff Book Heading 09.01.¹⁰ Selecting the correct, fully extended HS code is paramount for seamless customs processing and accurate duty calculation at the destination port. Importers generally require the precise

10-digit code specific to their national tariff schedule (e.g., the U.S. HTS).

The general classifications differentiate coffee based on decaffeination status and variety. For Arabica green beans specifically, the 10-digit U.S. classifications demonstrate granular differentiation, including certification status:

Arabica Green Bean HS Code Breakdown (Excerpt)

HS Code (8-Digit Subheading)	Full HS Code (10-Digit Sample)	Status	Certification/Type
0901.11.00	0901.11.00.15	Not Decaffeinated	Arabica, Certified Organic 15
0901.11.00	0901.11.00.25	Not Decaffeinated	Arabica, Other (Standard) 15
0901.22.00	0901.22.00.65	Decaffeinated	Arabica, Certified Organic 15
0901.22.00	0901.22.00.55	Decaffeinated	Arabica, Other 15

For smaller entities such as MSMEs and cooperatives, which represent the vast majority of producers ¹, navigating the requisite regulatory complexity, including the SPEK, Phytosanitary requirements, and precise HS code classification, frequently presents a substantial administrative barrier.⁹ This complexity favors large, vertically integrated trading houses or specialized export partners who offer comprehensive end-to-end documentation services ⁹, thereby limiting the direct market access for small producers, even if their product quality is competitive.

IV. The European Deforestation Regulation (EUDR) Mandate and Mitigation Strategy

4.1. EUDR Requirements and Enforcement Timeline

The European Deforestation Regulation represents the most immediate and profound regulatory challenge facing the Indonesian coffee export sector. The regulation mandates that operators placing commodities, including coffee, onto the EU market must provide a due diligence statement guaranteeing the goods were not produced on land deforested after December 31, 2020.⁴

The most critical technical requirement for compliance is the submission of the exact location (geolocation) of the coffee bean production area.⁴ The enforcement timeline dictates that large companies must comply with this granular traceability requirement starting December 30, 2025. Smaller companies are afforded a slight delay, with their compliance starting in June 2026.⁴ Failure to accurately specify the exact production location will result in the immediate and absolute loss of access to the lucrative European market.⁴

4.2. Impact Assessment on Indonesia’s Smallholder System

The EUDR places immense pressure on the Indonesian coffee supply chain due to the dominant role of smallholder farms, which constitute 98% of the national coffee cultivation area.¹ This structural reliance creates a conflict with the EUDR’s mandate. The majority of these small farmers often lack the essential resources—including access to geolocation technology, expertise in certification, and robust data collection infrastructure—required for compliance.⁴

This technological and financial gap means that a significant portion of the current Indonesian supply chain is potentially non-compliant with EU market requirements. The necessary investment in traceability infrastructure, satellite mapping, and farmer training to transition from volume-based sourcing to verifiable plot-based sourcing imposes a severe financial burden on small, family-run operations that rely heavily on European demand.⁴ Recognizing this systemic challenge, the EU has allocated €86 million to aid partner countries in their compliance efforts, underscoring the necessity of collaborative, multilateral programs to ensure systemic adoption of the new standards.⁴

4.3. Market Bifurcation and Compliance Risk

The stringent demands of the EUDR are anticipated to cause a structural bifurcation within the Indonesian coffee market. A high-compliance supply chain—characterized by verifiable traceability, comprehensive plot data, and higher operating costs—will emerge to serve the European market, likely leading to a premium pricing structure for EU-bound Indonesian specialty coffee.

Conversely, the volume of coffee unable to meet the December 2025 compliance deadline will be redirected toward less-regulated international markets (such as the US, Middle East, and parts of Asia). This potential redirection of non-compliant volume could lead to oversupply and subsequent price depression in these non-EU markets, creating a dual-tiered pricing system based fundamentally on demonstrable traceability compliance.

Furthermore, exporters must navigate overlapping regulatory scrutiny. Indonesia is updating its domestic food safety frameworks, including a new draft Indonesian FDA regulation on food contact materials and packaging circulated in August 2024.¹⁶ This domestic standard sets requirements for permitted food packaging materials, including migration levels and prohibited substances.¹⁶ Therefore, exporters must ensure that their chosen packaging solutions, such as high-density polyethylene GrainPro liners, comply not only with quality preservation standards required for transit but also with the migration level limits set by both the Indonesian FDA and the destination market authorities. Failure to meet the new domestic packaging requirements could result in refusal of the export approval (SPEK), rendering further logistical efforts moot.

V. Advanced Logistics, Quality Control, and Freight Dynamics (Q1 2025)

5.1. Green Bean Quality Management and Pre-Shipment Control

Preserving the quality of green beans during the export phase is a critical logistics function, as the product is highly sensitive to environmental factors.¹⁷ The primary quality metric is moisture content, with optimal standards ranging from 8.5% to 10.5% (with an acceptable export tolerance up to 12%).¹⁸ Green coffee is hygroscopic, meaning it absorbs moisture from the surrounding air.¹⁹ High moisture content in the storage or transit environment risks mustiness, mold growth, post-fermentation, and quality degradation resulting in undesirable characteristics like whitening or “baggy” flavors.¹⁸

Due diligence also extends to preventing microbial contamination. While EU regulations impose maximum limits for Ochratoxin A (OTA) only on finished products (roasted and soluble coffee at 5 to 10 parts per billion, respectively), the prevention of mold formation and resulting OTA contamination must be rigorously managed at the green bean stage through strict quality control, careful harvesting, and optimized storage practices.²⁰ Given that green beans are extremely susceptible to foreign odors, strict segregation must be maintained during warehousing and containerization to prevent taint.¹⁷

Optimal Green Bean Handling and Transit Standards

Parameter	Optimal Range/Requirement	Risk of Deviation
Moisture Content (Green Bean)	8.5% – 10.5%	Mold growth, off-flavors, quality degradation 18
Relative Humidity (Container)	50% – 65%	Condensation, water absorption (coffee “sweat,” oxidation) 18
Foreign Odors	None	Taint and permanent contamination risk 18

5.2. Packaging Standards for Export

Packaging serves as the final barrier of defense for quality preservation. The standard format involves the use of traditional jute (burlap) sacks, typically designed for a 60-kilogram capacity (approximately 100 cm x 70 cm).²¹

However, traditional jute sacks provide insufficient protection against moisture and air exposure during modern long-haul transit. Consequently, premium packaging solutions have transitioned from optional enhancements to critical risk mitigation strategies. High-density polyethylene GrainPro liners are sealed inside the jute sacks, matching the 60kg capacity. These liners are essential for creating an atmosphere with low oxygen and humidity, mitigating moisture absorption, preventing oxidation, and protecting beans during extended storage or prolonged sea transit.¹⁹ For industrial-scale logistics, Flexible Intermediate Bulk Containers (FIBC) or Super Sacks, made of woven polypropylene, are used for volumes of 1 ton or more.²¹

The geopolitical disruptions, particularly the lengthy diversions around the Cape of Good Hope required by the ongoing Red Sea crisis ⁵, significantly extend the duration coffee beans are exposed to high heat and humidity within the container microclimate. Since longer transit equals longer exposure to environmental risks, the period during which beans can absorb moisture and develop mold is substantially increased. Therefore, the use of high-barrier packaging systems, such as GrainPro liners, has become a mandatory logistical necessity for maintaining quality consistency for shipments destined for European and US East Coast ports.

5.3. Containerization and Shipment Strategy (FCL vs. LCL)

The global coffee trade moves the equivalent of approximately 400,000 20-foot container loads annually.²² Exporters must choose between Full Container Load (FCL) and Less than Container Load (LCL) strategies based on volume and required quality control.

FCL shipments are invoiced at a flat rate per container (FEU—Forty-foot Equivalent Unit) regardless of volume utilization.²³ This is the preferred method for high-volume roasters and specialty coffee procurement because the shipper retains control over the container preparation and the stuffing process, allowing for stringent quality control measures.²²

LCL shipments are used for smaller orders, paid per cubic meter (CBM) of shared space.¹¹ For LCL, the shipping line can only be held responsible for the number of bags and their apparent external condition, shifting responsibility for internal quality issues to the shipper.²² The break-even point where FCL becomes more cost-effective than LCL typically occurs around 15 CBM.²³

FCL vs. LCL Green Coffee Shipment Comparison (Cost/Volume, Q1 2025)

Shipping Type	Cost Basis	Volume Metric	Q1 2025 Rate Benchmark (Southeast Asia)*
FCL (40 ft FEU)	Flat Rate per Container	Approx. 250-280 60kg Sacks	$2,300 – $3,500 per FEU 23
LCL (Shared Container)	Rate per Cubic Meter (CBM)	Variable (shared space)	$120 – $280 per CBM 23
Break-Even Point	Volume	Approximately 15 CBM	Threshold where FCL becomes cheaper than LCL 23
*Note: Base freight rates exclude geopolitical surcharges and destination-specific fees.

Regardless of the choice, container preparation is essential for quality assurance. The container must be dry, structurally sound, free of foreign odors, and equipped with a suitable ventilation program designed specifically for the prevailing external temperature, humidity, and the beans’ moisture content to prevent internal condensation or “container sweat”.¹⁸

5.4. Current Freight Forwarding and Global Route Volatility

The global logistics market for Asian exports in early 2025 exhibits significant volatility. Base FCL rates for 40-foot equivalent units (FEUs) were quoted between $2,300 and $3,500 on major routes.²³ Air freight, while utilized less often for green beans, saw a substantial increase, with rates from Asia to the U.S. averaging $5.39 per kilogram, reflecting a 37% year-over-year rise in early January 2025.²⁴

The primary driver of current volatility remains the Red Sea crisis. Houthi attacks continue to force major shipping lines to reroute Asia-Europe cargo around the Cape of Good Hope.⁵ This diversion adds thousands of miles and weeks to transit times, significantly elevating operational costs, insurance, and the necessity for imposing surcharges on top of standard base rates. This ongoing situation introduces a “volatility premium” above base freight costs and causes cascading capacity constraints and delays across all global routes.⁵

Furthermore, the extended transit times resulting from these geopolitical delays amplify the inherent quality risks associated with LCL shipments. Since LCL cargo is commingled with potentially odor-emitting goods, and green coffee is highly sensitive to foreign odors ¹⁸, longer transit increases the likelihood of contamination or moisture damage within the shared container environment. This heightened exposure risk makes LCL an increasingly precarious choice for specialty-grade Indonesian Arabica, strongly favoring FCL as the strategy that prioritizes quality control and certainty, despite the higher fixed cost.

VI. Conclusion and Actionable Recommendations

The Indonesian green coffee export sector faces a pivotal moment defined by growth potential countered by unprecedented regulatory and logistical complexity. Successfully navigating the 2025/2026 market requires immediate investment in traceability infrastructure and adaptation to persistent global freight volatility.

6.1. Strategic Recommendations for Importers and Exporters

1. Prioritize EUDR Compliance and Traceability: Exporters targeting the European market must accelerate the implementation of geolocation protocols to meet the December 2025 deadline. Given the fragmented smallholder structure, reliance on scalable technological solutions, potentially through export partners or government aid programs, is mandatory to secure long-term European market viability.⁴
2. Mandate High-Barrier Packaging for Risk Mitigation: Due to the extended transit times caused by geopolitical rerouting, the use of high-barrier packaging, such as GrainPro liners, should be considered standard operating procedure for all premium and long-haul shipments. This mitigates the amplified risk of moisture absorption, mold growth, and quality degradation during extended sea transit.⁵
3. Optimize Freight Strategy at the Break-Even Point: For shipments exceeding the 15 CBM threshold, the FCL option should be strongly favored over LCL. In the current volatile freight environment, controlling the container microclimate and minimizing quality risks associated with commingling should take precedence over marginal savings offered by LCL.²²
4. Ensure Meticulous Documentation: Exporters must ensure the meticulous and timely preparation of all Indonesian export documents, including the mandatory SPEK and the correctly classified Certificate of Origin (COO/SKA Form ICO). Accurate documentation is essential not only for preventing customs delays but also for maximizing financial advantages through preferential tariff treatments at the destination.¹⁰

Proactive Regulatory Monitoring: Continuous monitoring of both international standards (EUDR) and domestic regulatory changes (e.g., the Indonesian FDA draft regulation on packaging materials) is required to ensure proactive compliance, preventing shipment delays or penalties due to overlooked administrative or material specifications.¹⁶

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