Minister urges coffee consumption to stabilize price

SURABAYA, East Java (JP): The minister of agriculture, Sjarifudin Baharsjah, called yesterday for a campaign promoting drinking coffee.

The minister said an increase in domestic coffee consumption was needed to stabilize local coffee prices.

"One way to stabilize the price is by selling more coffee domestically," he said.

He said unstable prices were largely because of coffee suppliers being too dependent on international markets and this really hurt local coffee farmers.

The president director of Aneka Coffee, Jeffry Sanusi Soedargo, said coffee consumption in Indonesia was only 0.8 kilograms a person a year, compared with average consumption in developed countries of between four to five kilograms a person a year and Scandinavian countries where the average was 12 kilograms a person a year.

Sjarifuddin said with their rising incomes, Indonesians should be consuming 1.6 kilograms of coffee a year.

He called on domestic coffee distributors to learn from Japan's distributors who successfully promoted coffee drinking in a tea-drinking society.

The minister was speaking at the opening of Aneka Coffee's new plant in Sidoarjo.

Aneka Coffee is 65 percent owned by Prasidha Aneka Niaga, 20 percent by Japanese trading house Itochu, 10 percent by PT Citrabuana Tunggal Perkasa and 5 percent by Japan's UCC Ueshima Coffee Co. Ltd.

Prasidha Aneka Niaga which listed on the Surabaya and Jakarta Stock Exchanges in 1994 is Indonesia's biggest processor and exporter of food and plantation commodities.

The US$23 million plant covering 30,000 hectares has a designated production capacity of 2,400 tons of ground coffee a year and 3,600 tons of instant coffee a year, making it one of the biggest coffee plants in South East Asia.

Eighty percent of the instant coffee and 20 percent of the ground coffee will be exported to Europe, Japan and America.

"We are also eying China's market as one with big potential," Jeffry said.

Prasidha Aneka Niaga exported 100,000 tons of coffee last year -- a quarter of the total country's export of 400,000 tons -- all of which from farmers. Prasidha and Itochu planned to open 600 hectares of coffee estate in Bengkulu this year to produce high quality coffee.

Mansjur, who is also head of the Association of Indonesian Coffee Exporters' promotion office, said the country's coffee output was likely to fall 15 percent in April's harvest. Heavy rains and strong winds hindered the second flowering of trees in coffee producing areas late last year.

Last week International commodity bourses were hit by rumors that Indonesia's coffee output might fall up to 40 percent.

Prasidha Aneka Niaga said it would soon sign two joint ventures with overseas commodity sector firms.

It will set up a joint venture with Itochu Corp to make crumb rubber for export.

Prasidha said it would own 51 percent of the venture, with Itochu controlling 49 percent.

It also plans to set up a joint venture with Burns, Philp and Co to source, process, grind, package, market and export pepper. (jsk/nur)