RI delays coffee talks and eyes new deals
RI delays coffee talks and eyes new deals
Dow Jones, Jakarta
Indonesia will hold off talks with Vietnam with regards to a previously proposed coffee retention plan, and will instead embark on new plans organized by the governments of both countries, a senior Indonesian official said Wednesday.
Ferry Yahya, director of exports for agriculture and mining products under Indonesia's Ministry of Industry and Trade, told Dow Jones that meetings between the two countries on the proposed retention plan have been postponed indefinitely.
Indonesia, however, is more keen to seal a more stable government-to-government agreement with Vietnam to cut exports in an attempt to boost dismal coffee prices.
Ferry said Indonesia will send a proposal to Vietnam on this alternative cooperation between the two countries.
"The program will include an option of a 50 percent cut in exports by the two countries or the implementation of a 1:2 ratio in exports, which means if Indonesia exports 100,00 metric tons of coffee, Vietnam will export 200,000 tons," he said.
"In principle, Vietnam has agreed, but we can only send a team there for discussions after we get a final word from the officials there," Ferry said.
In late July, Indonesia announced that it planned to retain 100,000 tons of coffee beans and proposed a similar export cut of 300,000 tons by Vietnam and 50,000 tons by India. While India indicated that it didn't wish to participate, Vietnam remained non-committal toward the proposal.
The Vietnam Coffee and Cocoa Association, or Vicofa, has estimated that the upcoming 2002/2003 crop will reach 500,000 tons, compared with the 600,000 tons yielded in the 2001/2002 crop year, due to erratic weather as well as fewer trees, as part of the government's policy to control robusta output.
The Association of Indonesian Coffee Exporters, or AEKI, has forecast a crop of 315,000 tons in 2002, down from last year's 350,000 tons.
Vietnam's coffee harvesting season runs from October through September, while Indonesia's season starts in March and ends in August or September.
On its enrollment Monday as the 40th member of the International Coffee Organization 2001 Agreement, Nuril Hakim, vice chairman of AEKI, said Indonesia hopes to utilize the benefits from being part of an organization, which aims to develop a sustainable coffee market.
Indonesia is the world's fourth largest robusta producer, and Vietnam is the second largest. Together with India, they account for 22 percent of world coffee production and 45 percent of robusta output.