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.