RI waits for Vietnam, India before starting coffee retention
RI waits for Vietnam, India before starting coffee retention
JAKARTA (JP): Indonesia has delayed its plan to join the
Association of Coffee Producing Countries (ACPC) coffee retention
program.
A source at the Ministry of Industry and Trade said on Friday
that the government had told ACPC executives that it would only
join the retention program if Vietnam and India did the same.
"Otherwise, joining the retention program is as useless as
putting salt into the ocean," he said.
Indonesia pledged last month to start retaining its coffee by
about 8,000 metric tons until the end of this year.
The amount makes up about 20 percent of the country's total
estimated coffee production of 40,000 tons within three months
starting in October.
Through the retention program, ACPC plans to retain 20 percent
of its coffee exports and help curb the drop in the price of
coffee.
The source said world coffee prices had plunged to about 70
U.S. cents per kilogram from the ideal price range of about
US$1.20 per kilogram.
He said the world coffee supply stood at over 123 million
sacks of coffee while demand was only for 103 million sacks. One
sack amounts to 60 kg.
However, despite ACPC enthusiasm to introduce the retention
program, only a few members have begun to realize the plan.
The world's largest producers, Brazil and Columbia, have
committed to reducing their coffee exports by 750,000 tons and
350,000 tons respectively as part of the retention program.
Indonesia was at first reluctant to join the program, because
of a lack of funds. In order to buy 8,000 tons of coffee from the
domestic market, the government must provide Rp 40 billion ($4.3
million). But it later said it would start to implement the
program last month.
He said Indonesia backed off from its plan because Vietnam and
India, also major coffee producers, had not yet decided their
position.
He said a letter from the Vietnamese government to ACPC,
claiming that the country had decided to join the program,
remained unchecked.
The Association of Indonesian Coffee Exporters (AICE) will
soon send a team to Vietnam to verify its participation in the
program, he said.
He further said the government had thus far no plans to join
the retention program in January next year.
A commitment, he said, would depend on next year's market
condition.
Oesman Soedargo, the former AICE chairman, said earlier that
joining the retention program might cost the government some Rp
360 billion or Rp 90 billion quarterly.(bkm)