ACPC urges RI to cut back on coffee exports

JAKARTA (JP): The Association of Coffee Producing Countries (ACPC) urged Indonesia on Monday to join its scheme to cut back exports by 20 percent, pointing to hefty financial penalty for members who refuse to comply.

ACPC "still expects Indonesia to join the retention plan that has been agreed on by ACPC members," the group said in a statement received here.

"Balance in the coffee market should benefit producers and consumers alike, thereby assuring the future of a healthy world coffee market and the sustainable development of coffee producing nations," it said.

Indonesia refuses to take part in the scheme, which came into force on June 1, arguing that its exports declined 14 percent this year to about 300,000 tons because of production shortfalls.

ACPC said the retention plan was supervised and controlled by a management committee, "which has the power to take sanctions against faulty participants, including a financial penalty proportional to the value of the coffee that has been exported in violation of the plan."

The Association of Indonesian Coffee Exporters (AICE) was not available to comment on the latest ACPC appeal.

AICE chairman Oesman Soedargo said last month that the association had financial difficulties in setting up storage facilities and allocating reserve funds to support the scheme.

He blamed bad weather for the decline in production to about 420,000 tons this year from an annual average of 500,000 tons.

AICE Secretary-General Noer Madjid told Antara on Monday that rampant plundering of coffee beans in production centers in East Java, Lampung and South Sumatra would deprive Indonesia of between US$600 million and $700 million in coffee export earnings this year.

The glut in the world market had caused a sharp drop in the price of robusta coffee to 90 U.S. cents a kilogram in June, from an average of $1.2 a kilogram last year, according to AICE.

Indonesia is the world's third largest coffee producer after Brazil and Colombia, and the world's second largest producer of robusta coffee.

ACPC groups Angola, Brazil, Colombia, Costa Rica, the Ivory Coast, the Congo, El Salvador, India, Indonesia, Kenya, Tanzania, Togo, Uganda and Venezuela. Together, they control about 85 percent of the world's supply. (10)