RI smust decide on coffee retention plan

RI smust decide on coffee retention plan

JAKARTA (JP): Indonesia will have to decide whether or not it
will join the Association of Coffee Producing Countries' coffee
retention plan before the association's meeting in London later
this month, a senior trade official said on Wednesday.

Director General of Foreign Trade at the Ministry of Industry
and Trade Djoko Muljono said that they will have to make a firm
decision before the meeting which would be held on Jan. 24.

ACPC members and key non-members agreed in May 2000 to a
retention plan, a scheme which is aimed at reducing the coffee
supply in the world market by 20 percent in order to cope with
falling prices.

Each member country, according to the plan, is required to
withhold 20 percent of their exports until prices hit 95 U.S.
cents a pound on the 15-day average of the International Coffee
Organization's composite index indicator.

The coffee price is hovering between 60 U.S. cents and 69 U.S.
cents per kilogram on the world market.

Although Indonesia has indicated strong support for the plan,
it cannot currently carry out the plan due to a lack of funding
from both the government and exporters.

Indonesia produces about 500,000 tons of coffee a year. More
than 85 percent of its total production is exported.

Djoko said Indonesia needs at least Rp 52 billion ($5.5
million) to finance the retention program.

Former chairman of the Association of Indonesian Coffee
Exporters (AICE) said earlier that some Rp 360 billion would be
needed in order for Indonesia to join the retention plan.

According to Djoko, the government has yet to discuss where
the money would be raised from if it finally agreed to the
retention proposal.

Separately, Minister of Agriculture Bungaran Saragih said that
intensive talks on the retention plan have been ongoing, and that
it was basically agreed upon.

He also said that the funds have been secured but declined to
name the precise source, saying that it is from banking sources.
(tnt)