Indonesia pulls out of coffee retention program
Indonesia pulls out of coffee retention program
JAKARTA (JP): Indonesia has pulled out of the coffee retention
program designed to shore up world coffee prices after learning
that two other major producers, Vietnam and India, would not take
part, Antara reported on Friday.
Minister of Industry and Trade Luhut B. Panjaitan told the
news agency that neither Vietnam nor India had sent
representatives to the meeting of the Association of Coffee
Producing Countries (ACPC) in London to discuss the program.
"Indonesia may reconsider its decision if Vietnam and India
decide to join the program," Luhut said.
The meeting, which opened on Friday, was held ahead of the
Oct. 1 deadline for ACPC countries to submit details of how they
intend to cut their exports by 20 percent to prop up prices from
57 U.S. cents per kilogram at present to 95 cents per kilogram.
Luhut said the ACPC retention program would cost Indonesian
coffee producers Rp 30 billion (US$3.4 million) to finance the
storage, insurance and maintenance of about 60,000 tons of coffee
which they would not be able to export.
The government, he added, could not give them any financial
support.
Having agreed to take part in the retention program when it
was first hammered out by ACPC members in May, Indonesia
repeatedly missed the deadlines to provide the details to the
association, first on June 16 and later when it was extended to
July 31. The association extended the deadline a third time to
Oct. 1.
The Association of Indonesian Coffee Exporters (AEKI) said
Indonesia failed to meet its commitment because coffee producers
failed to secure financial support from the government.
But as recently as last week, when ACPC chairman Sergio Amaral
visited Indonesia, the government was still giving assurances of
Indonesia's intention to implement the retention plan.
Indonesia exported 380,000 tons of coffee in 1999 compared to
325,000 tons in 1998. AEKI has estimated that Indonesia would
produce 420,000 tons and export 300,000 tons this year.
Besides Indonesia, other ACPC members are Angola, Brazil,
Colombia, Costa Rica, the Ivory Coast, the Congo, El Salvador,
India, Kenya, Tanzania, Togo, Uganda and Venezuela
Vietnam
Vietnam's agriculture ministry made a fresh proposal to the
government on Friday that the country should join the global
scheme to boost coffee prices by retaining exports.
But it was unclear if it would be approved.
A letter from the ministry to Prime Minister Phan Van Khai
proposed stockpiling 140,000 tons of coffee from a Sunday
deadline set by ACPC, which is organizing the scheme globally.
"We propose this measure to the government's prime minister to
decide on," said the letter, a copy of which was made available
to Reuters.
It also proposed Vietnam should consider joining the ACPC.
Vietnam's agriculture ministry first proposed stockpiling
coffee months ago, but the government has yet to respond. Earlier
on Friday, an official in Khai's office said details of a
previous proposal were still being debated.
The ministry letter proposed 60,000 tons of coffee should be
stockpiled by three state firms, the Vietnam Coffee Corp. and two
in Daklak and Dong Nai provinces.
Under the ministry proposal, the government would utilize a
coffee export surcharge fund established in the past to cover
bank interest on loans to purchase this amount.
Another 80,000 tons of coffee would be stockpiled by farmers
who could use the beans as collateral with banks for further
investment in coffee plantations, the letter said.
The agriculture ministry would be the management body of the
plan in cooperation with the trade and finance ministries, the
government's Pricing Committee and the Vietnam Coffee and Cocoa
Association.(02).