Govt asks banks to extend credit for coffee sector
Govt asks banks to extend credit for coffee sector
JAKARTA (JP): The government has urged banks to expand credits
for the expansion of coffee plantations to help maintain the
country's position as the third largest producer and exporter of
coffee in the world, an official says.
"We expect that the banking industry will realign its credit
policy to help improve the coffee sector," H. Syahroel, head of
the Center for Agriculture Development and Marketing of Ministry
of Trade, told reporters yesterday.
He said 93 percent of Indonesia's coffee output is produced by
small farmers and only seven percent from large-scale plantation
companies.
He would not elaborate the current position of the credits for
the coffee industry, but said that the banking industry should
support the country's plan to increase coffee production by
around three percent per year in the coming five years.
Indonesia, Asia's number one coffee producer, now plans to
increase its production to 500,000 tons in 1995 from 457,300 tons
in 1994.
The country exported 301,066 tons of coffee last year, as
compared to 354,602 tons in 1993 and 266,162 tons in 1992. Its
domestic sales of coffee reach around 120,000 tons.
Indonesia's coffee importers are, among others, Japan,
Germany, Poland, Britain, the United States and Algeria.
M. Noer Madjid, executive secretary of the Association of
Indonesian Coffee Exporters, told reporters that the banking
industry can gain momentum in providing more credit for the
coffee industry, considering coffee prices are now on an upward
trend.
"Coffee prices, now ranging between US$1.30 and $1.40 per
pound, are expected to increase to $2 per pound this year," he
said.
He added that coffee prices had even reached an average of
$1.90 per pound in October and November last year.
Domestic
On the domestic market, the coffee prices are traded at Rp
2,000 to Rp 2,500 per pound, substantially higher than the Rp
1,000 last December, he said.
According to Madjid, the price increase was partly caused by
unexpected frosts in Brazil, the world's largest arabica coffee
producer, last June.
"Brazil estimated that around 660,000 tons of coffee was
spoilt due to the frosts," he said.
With the increasing coffee prices, Indonesia, which is now the
largest producer and exporter of robusta coffee in the world,
expects to gain some $779 million from its coffee exports this
year, compared to some $671.90 million last year and $335.78 in
1993, he said.
Madjid also said yesterday that his association, which has now
1,000 members throughout the country, will hold a one-day seminar
here on Jan. 26 as part of its efforts to involve banking and
insurance industries in the development of the coffee industry.
The seminar is expected to be opened by Minister of Trade
Satrio B. Joedono. (fhp)