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)