Indonesia won't start coffee retention in October: Luhut

Indonesia won't start coffee retention in October: Luhut

JAKARTA (Reuters): Indonesia will not be able to start holding back coffee stock on Oct. 1 as part of a global plan to lift prices, because it is still seeking money to finance the scheme, Trade and Industry Minister Luhut Pandjaitan said on Thursday.

"There's no way we will be able to implement the retention plan in October," Luhut told reporters after meeting an Association of Coffee Producing Countries (ACPC) delegation.

"We still have to coordinate with other related institutions," he added.

Luhut said he would seek help from the finance ministry and the largest state bank, Bank Mandiri.

The government had earlier said it could not afford to finance the scheme and asked exporters to come up with the money.

The ACPC delegation, led by chairman Sergio Amaral, is in Indonesia on the last leg of its tour to Asian coffee producers to assess their participation in a scheme to withhold 20 percent of coffee exports.

The plan was endorsed by ACPC's 14 members in May. Luhut said increases in coffee prices would help smallholder farmers, who account for more than 80 percent of coffee output from Indonesia, one of the world's largest coffee producers.

The ministry's director general of international trade, Djoko Muljono, said the government would try to provide Rp 30 billion (US$3.42 million) to retain 5,000 tons of coffee beans every quarter.

"The money from the government will be used to buy coffee beans from farmers. The cost for warehouses, stock maintenance and the interest rates will be shared by the government and exporters," Muljono said.

Amaral said earlier on Thursday after meeting the Association of Indonesian Coffee Exporters (AEKI) that he expected Asian producers to start implementing the retention scheme from Oct. 1.

Indonesia is expected to produce 430,000 tons of coffee beans in the 1999/2000 coffee year, and export around 300,000 tons.