AEKI urges cooperation with Vietnam<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
he country's coffee exporters urged the government to talk with
\nVietnam, the world's largest robusta coffee exporter, in seeking
\nways to lift the current low price of the commodity.<\/p>\n
The Association of Indonesian Coffee Exporters (AEKI) said a
\nstronger price for robusta would help ensure the government's
\ntarget of a 30 percent increase in the export value of coffee
\nthis year.<\/p>\n
Rachmat Kartabrata, AEKI's executive secretary, said
\ncooperation between Vietnam and Indonesia -- the two largest
\nrobusta beans producers -- was crucial to revive the falling
\nprice.<\/p>\n
Vietnam had been blamed for creating an oversupply in the
\nworld market, which meant the price of the coffee beans had
\nplunged.<\/p>\n
\"We want to convince Vietnam that flooding the market is
\ndamaging. If we can do this then we can control the market
\nprice,\" Rachmat told The Jakarta Post over the weekend.<\/p>\n
Vietnam became the world's top robusta producer when its
\ncoffee production leapt from 413,600 tons in 1997-1998 to 900,000
\ntons in 2000-2001, taking over Indonesia's position. At present,
\nVietnam produces around 500,000 tons.<\/p>\n
Indonesia produces some 350,000 tons of coffee per year, of
\nwhich 85 percent is exported. Robusta beans account for 85
\npercent of Indonesia's coffee exports. The remaining 15 percent
\nproduced are Arabica beans.<\/p>\n
Rachmat said there was a wide 120 percent price gap between
\nthe prices of robusta and arabica beans and that measures must be
\ntaken to correct the situation.<\/p>\n
Robusta beans traded on London's LIFFE commodity future market
\nfor May stood at US$737 per ton. While Arabica beans traded on
\nNew York's CSCE commodity future market were around $1,770 per
\nton, Rachmat said.<\/p>\n
\"If the price gap can be narrowed down to 80 percent, the
\nprice for robusta beans could be increased up to $900 per ton,\"
\nRachmat said.<\/p>\n
The Vietnam Coffee and Cocoa Association (VICOFA) and AEKI had
\nsigned a preliminary agreement last year to limit coffee exports
\nand prop up the price. But no commitment was made on how to
\nimplement the scheme.<\/p>\n
\"This is why we need government support to follow this up\"
\nRachmat said.<\/p>\n
Vietnam and Indonesia supply the world market about 1.03
\nmillion tons of robusta beans a year, more than half the 1.9
\nmillion tons annually demanded.<\/p>\n
Global coffee demand is primarily for the Arabica bean
\nconsidered the high grade coffee bean. But the lesser quality
\nRobusta is often blended with Arabica coffee.<\/p>\n
The government wants the country's coffee export to increase
\nby 30 percent from $510 million in 2003 to $663 million this
\nyear.<\/p>\n
Rachmat said Indonesia's coffee supply was predicted to be
\nstagnant this year as many farmers had abandoned their
\nplantations due to the low price.<\/p>\n
The World Bank on Saturday warned plunging world coffee prices
\nwould send between 20 to 25 million smalltime growers in
\ndeveloping countries into abject poverty.<\/p>\n
The Bank projects coffee production to slide from 123.2
\nmillion bags in the 2002 to 2003 season to 106 million bags this
\nyear. But the slow recovery in prices threaten the sustainability
\nof the commodity.<\/p>\n
Coffee prices have just recovered from a 100-year low. Arabica
\nbeans are set to rise from $68 a bag to $72 next year. While
\nrobusta beans are projected to recover to $40 next year from the
\ncurrent $38.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/aeki-urges-cooperation-with-vietnam-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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