Indonesia may not join coffee retention plan, says AICE chief<\/p>\n
JAKARTA (JP): Indonesia may not join a global coffee retention
\nplan due to financial difficulties and an estimated drop in
\ncoffee exports, chairman of the Association of Indonesian Coffee
\nExporters (AICE) Oesman Soedargo said on Wednesday.<\/p>\n
Oesman said the association had difficulties obtaining the Rp
\n4.9 billion (US$569,767) needed in setting up storage facilities
\nand to allocate reserve funds to support the retention plan.<\/p>\n
He said that, although Indonesia would not join the retention
\nplan, the country's exports would decline due to an estimated
\ndrop in production.<\/p>\n
The lower production would result in a decline in exports to
\n300,000 metric tons from the initial target of 350,000 tons, he
\nsaid, adding that with this lower production scenario, Indonesia
\nwould no longer need to cut its exports by 20 percent as required
\nunder the retention plan.<\/p>\n
\"Coffee export should be 350,000 tons, but now we'll barely
\nreach 300,000 tons,\" Oesman told reporters on the sidelines of a
\nhearing with the House of Representative's Commission V, which
\noversees trade and industrial affairs.<\/p>\n
Fourteen members of the Association of Coffee Producing
\nCountries (ACPC), including Indonesia, agreed May 19 on a plan to
\ncut coffee exports by 20 percent to help stimulate world coffee
\nprices.<\/p>\n
AICE members, which make up some 85 percent of world supply,
\nshould have outlined a detailed retention plan by June 16, but
\nIndonesia failed to respond, pending confirmation from the
\ncountry's regional producers.<\/p>\n
\"We must ask the regional producers whether they could afford
\nto join the plan,\" he said, adding bad weather might reduce this
\nyear's coffee production to around 420,000 tons from an average
\nof 500,000 tons.<\/p>\n
Oesman estimated that by July Indonesia could respond to
\nACPC's coffee retention plan.<\/p>\n
He further said that unlike in other countries, Indonesian
\ncoffee exporters must cover the retention cost by themselves.<\/p>\n
He said the Indonesian government had rejected the
\nassociation's request to cover this year's retention costs
\nbecause of a lack of funds.<\/p>\n
According to him, Brazil, which produces some 24 million 60-
\nkilogram bags, prepared funds of 300 million reals (US$165.7
\nmillion) for the retention plan.<\/p>\n
Oesman acknowledged that retaining coffee exports was the best
\nway to stimulate international coffee prices.<\/p>\n
He said an oversupply had caused a sharp drop in the price of
\nrobusta coffee to 90 U.S. cents per kilogram from an average of
\n$1.2 per kilogram last year. (bkm)<\/p>",
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