Indonesia's coffee exports to fall by 10% this year

JAKARTA (JP): The Association of Indonesian Coffee Exporters (AEKI) predicted that the country's coffee exports would fall by 10 percent to 279 million tons this year from 310 million tons last year, in line with a plunge in the country's production.

AEKI's executive secretary Noer Madjid attributed the lower output primarily to low international prices amid a market glut.

"Low coffee prices have discouraged many farmers from cultivating coffee trees properly, which, in turn, causes reduced yields," Noer told The Jakarta Post.

Noer said if the coffee prices continued to decline, putting heavier pressure on farmers' overheads, exports could further dive to 163 million tons, 15 percent down from last year.

He said that 80 percent of domestic coffee production had been directed toward the export market.

Noer also said that the current strengthening in the exchange rate of the rupiah against the U.S. dollar could further worsen the country's coffee exports.

"If the local unit rebounds too quickly against the greenback, the competitiveness of our coffee products in the international market becomes weaker," he warned.

The rupiah jumped on Monday to Rp 8,605 per dollar, its highest level since September.

As of June this year, the country's coffee exports stood at 183 million tons, according to AEKI's data.

According to the data, from 1996 to 2000, the country's coffee exports declined to 310 million tons from 381 million.

With regard to the Vietnamese government's plans to cut down between 150,000 and 180,000 hectares of coffee during the upcoming 2001/2002 crop year in a bid to prop up prices in the international market, Noer was skeptical, saying that such a plan was unreasonable.

"If they cut coffee trees down, they will lose their source of revenue as a coffee tree needs four to five years from planting to harvest time," he said, doubting that any coffee-producing country would take such a risk.

Vietnam is the second largest coffee producer and exporter after Brazil, with production of 720,000 tons and 1.95 million tons respectively.

Brazil's and Vietnam's output accounts for 38 percent of the total world production of 6.84 million tons. (03)