RI to retain 40,000 tons of coffee to prop up prices<\/p>\n
JAKARTA (JP): Indonesia plans to retain up to 40,000 tons of
\ncoffee until August this year as part of its commitment to prop
\nup falling coffee prices in the world, Minister of Agriculture
\nBungaran Saragih said on Monday.<\/p>\n
The minister said that the decision to join the coffee
\nretention program initiated by the Association of Coffee
\nProducing Countries (ACPC) last year was taken in October, 2000.<\/p>\n
In the first stage, the duration of which began in October and
\nis completed at the end of January, Indonesia would retain 8,000
\ntons or about 20 percent of about 40,000 tons of coffee which are
\navailable for exports during the period, he told a press
\nbriefing.<\/p>\n
The minister's statement was issued ahead of ACPC's annual
\nmeeting to be held in London on Wednesday.<\/p>\n
In the second stage of the Indonesian retention program, which
\nwill be carried out from February until May, about 14,000 tons or
\nabout 20 percent of 70,000 tons of coffee available for exports
\nduring the period will be withheld, Bungaran added.<\/p>\n
In the third stage from June to August, according to the
\nminister, another 18,000 tons will be withheld, also about 20
\npercent of 90,000 tons of coffee available during the period.<\/p>\n
\"In September we hope producers will no longer need to retain
\ntheir coffee because in that period, coffee prices are expected
\nto reach a minimum target of 80 U.S. cents per pound,\" he told
\nreporters.<\/p>\n
ACPC's major members made an agreement in September last year
\nto retain 20 percent of the world's coffee exports in a bid to
\nreduce oversupply.<\/p>\n
Indonesia was at first reluctant to join the program, because
\nof a lack of funds and the time required to wait for Vietnam and
\nIndia, as other major coffee producing countries in Asia, to take
\npart in the scheme.<\/p>\n
\"But, it is our commitment to participate since our President
\nhas expressed full support (in the scheme) during his visit to
\nLatin American countries last November,\" Bungaran said in a
\nreference to President Abdurrahman Wahid's commitment to the
\nvisiting chairman of the international coffee organization late
\nlast year.<\/p>\n
Minister of Trade and Industry Luhut Pandjaitan confirmed on
\nMonday that Indonesia had agreed to join the coffee retention
\nprogram.<\/p>\n
But he said that the retention plan would only start
\nimmediately after Finance Minister Prijadi Praptosuhardjo agreed
\nto provide a loan to finance the program.<\/p>\n
Luhut said that the finance ministry was expected to provide
\naround Rp 55 billion in loans (US$5.85 million) to finance the
\nfirst phase of the retention program.<\/p>\n
\"We're just waiting (for approval) from the finance
\nministry ... We expect to start (the retention plan) next week,\"
\nLuhut told reporters following a meeting with Coordinating
\nMinister for the Economy Rizal Ramli and Minister of Agriculture
\nBungaran Saragih.<\/p>\n
Luhut said that the Rp 55 billion loan would be given to the
\nIndonesian Association of Coffee Exporters (AEKI) to cover the
\nextra costs for storage, insurance, and maintenance of the 8,000
\ntons of coffee to be kept under the first phase of the retention
\nscheme.<\/p>\n
At the press briefing, Bungaran said that the government had
\nsecured about Rp 200 billion in funds needed to support the
\nretention program.<\/p>\n
The money would primarily be used by AEKI members to buy
\ncoffee from local coffee producers, and to pay warehousing costs,
\nhe said.<\/p>\n
He said that the money would be repaid to the government
\nimmediately after the retained coffee were released into the
\nmarket.<\/p>\n
The world's coffee supply reached over 123 million sacks in
\nthe world market by the end of last year, exceeding the demand of
\nonly 103 million sacks. Each sack amounts to 60 kilograms.<\/p>\n
That makes the price of coffee hover at its lowest price of
\nbetween 60 U.S. cents and 70 U.S. cents per kilogram on the world
\nmarket as against the ideal price of US$1.20 per
\nkilogram.(03\/rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-to-retain-40000-tons-of-coffee-to-prop-up-prices-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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