RI 'has not provided' money for coffee plan

RI 'has not provided' money for coffee plan

SINGAPORE (Dow Jones): Indonesia hasn't provided promised financial support for a coffee retention program aimed at propping up world coffee prices, according to Nuril Hakim, vice chairman of the Association of Indonesian Coffee Exporters, or AEKI.

"So far, the government hasn't contacted AEKI yet, neither has Bank Mandiri," Hakim said told Dow Jones Newswires Wednesday.

The Indonesian government said last week it will support retaining up to 40,000 tons of coffee this year. The Ministry of Finance was expected to provide Rp 55 billion to finance the first phase of the retention program.

At the same time, President Abdurrahman Wahid said state-owned Bank Mandiri will handle the financing of the retention plan, estimated to cost Rp 200 billion.

Hakim said about 10,500 metric tons of coffee are being stored by exporters in eight warehouses in Lampung. The provinces of Lampung, Bengkulu and South Sumatra account for 75 percent of Indonesia's coffee output.

He said, however, that the coffee in those warehouses has been withheld by sellers because of low prices and not the retention plan.

Hakim said AEKI will wait until April 1. If the Rp 55 billion isn't received by then, exporters will sell off the coffee if prices improve.

The retention plan, adopted by the Association of Coffee Producing Countries, is a global plan aimed at lifting sagging world prices.

Under the plan, 20 percent t of global exports will be withheld until prices reach the International Coffee Organization's reference price of 95 U.S. cents a pound.

That indicator currently stands at 49.77 cents/pound.