Facing EU Hurdles, Indonesian Coffee Farmers Look to Pivot to North Africa

With the EU Deforestation Regulation (EUDR) set to take full effect by the end of this year, Indonesia is seeking new markets, including North Africa, for its coffee, cacao, and other agricultural commodities.

Indonesia’s government is seeking new markets, including North Africa, to support its smallholder coffee and cacao farmers who risk losing access to the European Union (EU) due to the bloc’s new deforestation regulations, a senior official told Bloomberg.

“We are currently helping to find other markets,” Indonesian Deputy Foreign Minister Arif Havas Oegroseno said in an interview on Thursday. “North Africa is now emerging as a potential market for coffee and cacao.”

The Indonesian government is also working with Egypt to increase exports to the country, while also eyeing Libya and Syria as other prospective markets, Havas said.

The EU Deforestation Regulation (EUDR), set to be fully implemented by the end of this year, aims to curb deforestation linked to the production of commodities such as soy, cacao, coffee, beef, and palm oil.

Indonesia is the world’s largest supplier of palm oil and one of the leading producers of coffee and cacao.

Havas stated that while large corporations can implement geotagging systems to prove their products are deforestation-free, smallholder farmers often cannot afford the associated costs.

In East Bali, for example, cooperatives had to spend around $30,000 to geotag just 200 hectares of cacao farms.

He also expressed concern that it remains unclear whether European importers will be willing to pay a premium for sustainably produced goods.

“Complying with EU regulations means incurring costs, and this cost might be even higher than finding a new market,” Havas said. “While they are incurring extra costs, the price is not guaranteed.”

He added that the government is also working to expand the domestic market for palm oil by increasing its use in the production of biofuel and sustainable aviation fuel (SAF).