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)