RI ready to support coffee consortium plan<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
In a bid to help prop up the sluggish price of coffee, some key
\nproducing countries, namely Indonesia, Vietnam and India, are
\nplanning to set up a joint coffee consortium, the Association of
\nIndonesian Coffee Exporters (AEKI) says.<\/p>\n
\"The three countries have, in principle, agreed to set up a
\njoint coffee consortium and we will hold the first meeting in
\nVietnam, possibly by the end of this month, to discuss the
\nmechanism,\" AEKI vice chairman Nuril Hakim told reporters after
\nmeeting with Minister of Trade and Industry Rini M. Soewandi on
\nMonday.<\/p>\n
Rini will lead the Indonesian delegation which will comprise
\ntop ministry officials and local coffee exporters.<\/p>\n
Nuril said that under the planned consortium each country
\nwould buy coffee from their respective local markets and set up a
\nstockpile so as to prop up the coffee price to 90 U.S. cents per
\nkilogram, from the current 41 U.S. cents.<\/p>\n
\"We are ready to withhold some 100,000 tons of coffee, and we
\nhope both Vietnam and India will be ready to withhold 300,000
\ntons and 50,000 tons respectively to meet the target of 90 U.S.
\ncents per kilogram.\"<\/p>\n
Nuril added that Rini had also pledged to seek help from
\nlocal banks such as Bank Export Indonesia, Bank Rakyat Indonesia
\nand Bank Central Asia, to finance this retention plan.<\/p>\n
\"We need some Rp 30 billion to buy and withhold 100,000 tons
\nand Ibu Rini has pledged to seek help from the local banks,\"
\nNuril said.<\/p>\n
According to Nuril, the planned consortium was adopted from
\nthe $225 million joint rubber consortium, which was established
\nby Indonesia, Thailand and Malaysia, to raise rubber prices to a
\n$1 per kilogram this year.<\/p>\n
Under the consortium, Thailand, as the biggest rubber
\nexporter, agreed to contribute $25 million. Indonesia, the second
\nbiggest rubber exporter, will contribute $18.75 million and
\nMalaysia will give $12.5 million.<\/p>\n
However, Rini admitted that Indonesia could only contribute
\nsome $1 million due to a lack of funding from the government.<\/p>\n
Last year, the cash-strapped government also failed to finance
\na Rp 40 billion retention plan to retain 8,000 tons of coffee as
\nproposed by The Association of Coffee Producing Countries, due to
\nthe lack of funding both from the government and exporters.<\/p>\n
Coffee prices have long been under pressure amid an oversupply
\nproblem in the market due to abundant supplies from the world's
\nlargest coffee producers, particularly Brazil and Vietnam.<\/p>\n
Brazil's annual coffee output totals 1.95 million tons, while
\nVietnam produces 900,000 tons. Both countries jointly control 38
\npercent of the world's total coffee production.<\/p>\n
In Indonesia, some local coffee growers have complained that
\nthey have been suffering losses as the coffee price is far lower
\nthan the production costs.<\/p>\n
The low price had also discouraged many local growers from
\ntaking proper care of their crops which resulted in a drop in the
\ncountry's coffee output.<\/p>\n
Indonesia produces about 500,000 tons of coffee a year. More
\nthan 85 percent of its total production is exported.<\/p>\n
The provinces of Lampung, Bengkulu and South Sumatra account
\nfor 75 percent of Indonesia's coffee output.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-ready-to-support-coffee-consortium-plan-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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