RI fails to get relief on coffee retention scheme

RI fails to get relief on coffee retention scheme

By Riyadi

NUSA DUA, Bali (JP): Indonesia failed yesterday in its efforts to gain some relief from the export retention scheme aimed at boosting prices among coffee-producing countries.

The Management Committee of the Association of Coffee Producing Countries (ACPC), which met here yesterday, did not make any decision about the Indonesian-sponsored proposal on the export program in relation to its members.

"Because of the nature of the committee, there was no political decision taken here. This is important, not to frustrate expectations, because it was not anticipated to take any policy decision today," association chairman Rubens A. Barbosa said after the meeting.

Yesterday's meeting was attended by representatives from Brazil, Colombia, Costa Rica, Cote d'Ivoire, El Salvador, Indonesia, Kenya, Tanzania, Uganda and two African coffee organizations.

Indonesian Minister of Agriculture Sjarifudin Baharsjah proposed at the opening of the meeting that the association consider a more flexible implementation of the export program for its member-countries, depending on their respective production capacities.

He said that at the time of the launching of the export retention program in October 1993, Indonesia produced some 450,000 tons of coffee and had 550,000 tons available for export.

However, because of poor climatic conditions, Indonesia's coffee output for the 1994-1995 coffee year, ending last September, was estimated at only 375,000 tons.

"This necessitates a more flexible implementation of the retention plan to avoid unnecessary and unfair burdens on the part of our producers and traders," Sjarifudin said.

When asked about the Indonesian proposal, Barbosa declined to comment. "This is to be up to the country to decide. I'm the coordinator. I cannot give my personal opinion on this matter," he said.

Barbosa reiterated that the committee had not discussed Indonesia's suggestion as made by the minister.

Understanding

Meanwhile, Association of Indonesian Coffee Exporters chairman Oesman Soedargo said that the ACPC could reach an understanding of the Indonesian situation.

"It is true that today's meeting did not discuss or take any decision on the retention scheme. However, based on the evaluation on the difficulties we face, the meeting could understand any policies to be taken by the Indonesian government," Oesman said.

He said such an "under standing" would mean that the ACPC would "tolerate" Indonesian policies which might deviate from the retention scheme.

The scheme requires countries to hold back exports by 20 percent when prices of robusta -- which makes up the bulk of Indonesian coffee exports -- drop to below US$1.35 per pound.

Producers must retain 10 percent of robusta exports when prices, based on the ACPC's calculation of a 20-day moving average, are between S1.35 and $1.50 per pound.

Currently, international coffee prices range from S1.04 to $1.10, which automatically requires a 20-percent retention.

Barbosa said that the ACPC's management committee had recommended at yesterday's meeting the initiation of internal consultations regarding the coordination of supply policies after June 1996.

The results of these internal consultation will be reviewed at the association's next meeting, which is to be held in London in January, Barbosa said.

He also reported that the implementation of the export program in the July-September period of this year had exceeded its target by 5 percent, reaching 15.4 million bags.

The difference would be adjusted for in the October-December period, Barbosa said.