Coffee producing countries fail to stabilize prices
Coffee producing countries fail to stabilize prices
By Riyadi
NUSA DUA, Bali (JP): The Association of Coffee Producing
Countries (ACPC) has failed to stabilize coffee prices on the
world market, an executive said.
Chairman of the Association of Indonesian Coffee Exporters,
Oesman Soedargo, said here yesterday that international coffee
prices were predominately dictated by coffee importing countries
and fund managers.
"We acknowledge that ACPC has failed to stabilize prices. And
this is one of its weaknesses," Oesman stated after the opening
of the two-day international coffee symposium.
ACPC's management committee held its informal meeting here on
Monday and discussed recent international market developments. It
did not however touch on the possible revision of price ranges in
relation to its export retention scheme.
Instead, the committee recommended the initiation of
international consultations on the coordination of coffee supply
policies after June 1996. The idea will be discussed at its next
meeting in London in January.
ACPC President Rubens A. Barbosa said ACPC was effective in
propping up coffee prices. Coffee prices have increased twofold
since the creation of the association in 1993.
"So far the results are perhaps not as good as some countries
wish, but this is a good result. What will happen in the future
will depend on a number of factors that affect price formation,"
Barbosa said.
He noted that member countries are convinced that ACPC
policies will attain price recovery and the stabilization of
coffee supply and demand in international markets.
Blame
Paian Nainggolan, chairman of the Indonesian delegation at
ACPC's informal meeting, said yesterday that ACPC could not be
blamed entirely for the current drop in coffee prices.
He suggested that concerted measures by ACPC members were
needed to challenge the domination of coffee importing countries
and fund managers in influencing international coffee prices.
A local commodity analyst said a number of ACPC members do not
abide by ACPC's retention scheme, which requires them to hold
back 10 percent when prices of robusta coffee range between
US$1.35 and $1.50 per pound. Producers must retain 20 percent of
robusta exports when prices drop to a level below $1.35 a pound.
Current coffee prices require a 20 percent retention.
The analysts suspect that large coffee producing countries,
like Brazil and Columbia, did not retain a portion of their
coffee as required by the retention scheme.
The Indonesian government is "too rigid" with its retention
policy, which, he said, has forced local coffee exporters to
incur losses.
Oesman said recently that local coffee exporters had suffered
many losses because of the government's fastidiousness.
The retention plan leads local exporters nowhere because they
must retain a portion of their coffee, Oesman said, adding that
it has forced exporters to spend more on depreciation, storage
rents and monthly inspection fees.
The government requires local exporters to store their
retained coffee in designated warehouses which are administered
by stated-owned surveyor firm PT Sucofindo.
The total amount of coffee held back by local exporters has
reached 20,000 tons.
Indonesia's coffee output for the 1994-1995 coffee year, which
ended last September, dropped to 375,000 tons from 450,000 tons
in 1993-1994.