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

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)