2002 coffee output to remain below projections: AEKI

Adianto P. Simamora The Jakarta Post Jakarta

The country's coffee output and exports will continue to remain below yearly targeted levels next year as low international prices for the commodity have discouraged local coffee growers, according to an executive of the Association of Indonesian Coffee Exporters (AEKI).

AEKI vice chairman Nuril Hakim said on Wednesday that the Indonesian 2002 coffee output was projected to reach around 420,000 tons, with total exports of between 300,000-320,000 tons.

"Next year's output level will remain the same as this year's," he told the Jakarta Post.

As of October this year, the country's coffee exports stood at 299,000 tons, he said.

According to Nuril, the main problem faced by local coffee growers is the persisting pressure on coffee prices which have plunged to historical lows.

Coffee prices have long been under pressure amid an oversupply problem in the market due to abundant supplies from key coffee- producing countries particularly Vietnam and Brazil.

The low price has discouraged many local growers to take proper care of their crops which resulted in drop of the country's coffee output.

Indonesia used to produce about 500,000 tons of coffee a year. More than 85 percent of its total production goes to the export market.

The provinces of Lampung, Bengkulu and South Sumatra - the country's key producing areas - account for 75 percent of the total coffee output.

Many efforts have been launched by key producing countries to prop up the prices of the commodity.

According to Nuril, key producing countries including Indonesia, Vietnam and India would soon hold a meeting in January to discuss measures in an effort to prop up the sagging coffee prices.

"The (fate of the) coffee price now mainly depends on Vietnam. It will improve once Vietnam is willing to cut their supplies on the international market," he said.

Nuril said that in the upcoming meeting, Indonesia would urge Vietnam to reduce its production next year.

Vietnam, which exports most of its coffee, is the world's largest robusta exporter and the second largest coffee exporter overall after Brazil.

Vietnam's annual coffee output totals 900,000 tons, while Brazil produces 1.95 million tons.

Brazil and Vietnam jointly control 38 percent of the world's total coffee production of 6.84 million tons.

Previous negotiation talks have failed to seek a solution to the plunging coffee prices.

In Indonesia, some coffee growers have complained that they've been suffering losses as output price is lower than production costs.

"Many local coffee growers can no longer afford the higher production cost, so they could not cultivate their trees properly," one coffee traders said.