Coffee producing countries expect higher prices
Coffee producing countries expect higher prices
JAKARTA (JP): The Association of Coffee Producing Countries
(ACPC) expects higher prices for this coffee year, which began
last month, due to association's control over the supply.
The association's secretary-general, Robert Oliveira Silva,
told journalists here yesterday that this year's supply of coffee
would be a bit larger than last year.
"The association is working hard to control the supply for
this coffee year," Silva told journalists before attending a two-
day international coffee symposium, which concluded yesterday.
The coffee market is passing through a very difficult moment
even though the association has been doing very well in terms of
what the coffee producers have proposed for themselves, Silva
said.
At the same time, however, the prices are not reacting
properly to the association's measures.
"I think that the union of the producers -- ACPC -- is able to
react to it here in Bali. It is very proper for achieving our
objectives in term of prices. I'm sure for this coffee year we
are going to have the prices we expected," Silva said.
The chairman of the Association of Indonesian Coffee
Exporters, Oesman Soedargo, earlier criticized the ACPC for its
failure to stabilize coffee prices on international markets.
He pointed out that the ACPC could not significantly influence
coffee prices on international markets, which has already been
dominated by fund managers.
"In such a way, that is right ... and we have to take them
into account. But they (fund managers) are not responsible for
the coffee prices right now. They are out of our market," Silva
said.
When asked about the those member counties which do not abide
by ACPC's export program to control the supply, Silva said,"It's
entirely up to each country to follow the program because it's a
voluntary program."
He noted that ACPC members, which held their meeting here on
Monday, would abide by the stabilization of coffee prices through
the export retention plan.
Flexibility
Indonesia, however, asked the ACPC for a more flexible
implementation of the retention plan to avoid unnecessary and
unfair burdens on local coffee producers and traders, who are
upset with the high costs of the retention program.
"We are trying to see the overall situation, but it is not
possible to tackle the problem on an isolated basis. We have to
try to evaluate the overall situation in the market and come up
with a solution here in Bali," Silva said.
The retention scheme requires coffee producers to retain 20
percent when robusta coffee prices reach below US$1.35 per pound,
10 percent when the prices range between $1.35 and $1.50, and
zero percent when the prices at between $1.50 and $1.60.
Producers are allowed to release their retained coffee when the
price exceeds $1.60 a pound.
The current prices require 20 percent retention.
Meanwhile, the senior vice president of coffee processing
company Nestec Ltd. of Switzerland, Gordon S,. Gillet, told the
symposium yesterday that the retention had helped neither coffee
producers nor roasters.
The limitation of fresh coffee reaching the marketplace will
result in the further reduction of the supply chain on the part
of roasters, Gillet continued.
Concurring with Gillet's argument, the managing director of
Phyfe & Co. Inc. Ltd. of the United States, Abba Bayer, noted
that the decline in the volume of coffee to be roasted resulted
from the pricing structure.
Reduced consumption combined with the ability of the industry
to dramatically shorten its distribution chains have resulted in
today's price level.
Gillet and Bayer suggested that both producers and consumers
try their best to improve consumption by attracting new drinkers
and creating new types of products. (rid)