RI to reduce coffee exports to prop up prices

RI to reduce coffee exports to prop up prices

JAKARTA (JP): Indonesia will reduce its coffee exports by
150,000 60 kg bags in the first half of this year under a plan to
lift robusta coffee prices, Association of Indonesian Coffee
Exporters vice chairman Mustafa Sulaiman said yesterday.

Mustafa said the reduction was part of a plan adopted by key
producers grouped in the Association of Coffee Producing
Countries (ACPC) in Brazil last month.

Under the plan Indonesia reduces exports from association
members by 1.3 million bags. One million bags coming from robusta
producers and the rest from arabica producers.

African countries had pushed for the cuts in a bid to lift
robusta prices. The plan will reduce exports by the association's
14 members to 24.98 million bags between January and June this
year.

"We have decided to reduce our exports of robusta by 150,000
bags. The remaining 850,000 bags will have to be allocated among
African and other robusta producers," Mustafa was quoted by
Reuter as saying.

"Our decision is final. It is not open to negotiation," he
said from Nusa Dua, Bali, where the International Coffee
Organization (ICO) is holding a three-day meeting which opened
Monday.

He said Indonesia's decision was made known at the ACPC
meeting in Brazil on Jan. 23.

The group had previously decided to limit members' exports to
26.28 million bags.

ACPC decided in Brazil that arabica coffee producers would
export 300,000 fewer bags and the remaining export cuts would
come from countries producing the robusta variety.

"We hope robusta producers, such as Vietnam, will share the
allocation (of export cuts) along with the Ivory Coast, Uganda,
Brazil, Ecuador and others," Mustafa said.

Indonesia last year exported 320,000 tons of coffee worth
US$607 million. This supplied about eight percent of world
demand.

Most of the coffee went to the United States, Japan and
Europe.

Executive director of the International Coffee Organization
(ICO) Celsius Lodder said ACPC's move to reduce exports would not
cause price volatility.

Lodder said the move was aimed at making robusta prices
stable.

Lodder said he expected coffee prices to be stable in 1997,
with sporadic fluctuations. He said he expected prices to average
between 1.25 and 1.30 cents a pound.

He said stocks in importing countries were about six million
to seven million bags.

"Stocks are quite low, about six percent of demand compared
with 10 to 14 percent last year. Certified and noncertified
stocks are six to seven million bags," he said.

He said strategic stocks, which are used by countries to
supply their domestic markets, are being kept near zero.

"The cost of keeping the stocks is very high, so they are
reducing them to minimum levels. Roasters' strategic stocks allow
them to supply their market for up to one month," he said. (pwn)