Some Sumatra farmers abandon plantations

Some Sumatra farmers abandon plantations

SINGAPORE (Reuters): Hundreds of Indonesian farmers have abandoned coffee plantations in Sumatra because of low international prices, while Vietnamese growers start to cultivate other crops to survive, traders said on Thursday.

London robusta futures dropped to a fresh 30-year low on Monday, with the September contract ending $8 lower at $525 per ton. Prices rebounded to $531 on Tuesday but fell back to close at $527 on Wednesday.

"It's very sad. We've been in such a sorry state in the past two years. How can farmers eat if prices stay low like this," a trader in Bengkulu, Sumatra, told Reuters by telephone.

"Thousands of hectares of coffee plantations have been abandoned. Farmers shifted to cultivating rice or going into the forests to collect resin. Many plantations were not even harvested last year."

Rising prices of fertilizer in crisis-hit Indonesia is another reason many farmers decided to find other sources of income. Some have become construction workers instead.

Grade four robusta beans in Sumatra were quoted at around 3,600 rupiah ($0.32) per kg this week, compared with around 6,000 rupiah/kg in early 2000 as increases in global supplies put constant pressure on the London market.

At current coffee prices, farmers can only buy one kg of rice compared with three kg two years ago.

Indonesia's coffee plantations were estimated at 1.1 million hectares in 2000. The provinces of south Sumatra, Bengkulu and Lampung account for 75 percent of output.

"The world only cares about one thing -- there is an oversupply. Vietnam has put so much pressure on the market," said the Bengkulu-based trader.

Some traders in Indonesia blamed Vietnam, the world's largest robusta producer, for failing to curb production.

In Vietnam, where robusta grade two, five percent black and broken, dived to a record low of $380 per ton for spot, FOB Saigon, this week, traders said growers started to cultivate vegetables and other cash crops to compensate.

Vietnam's 2001/2002 coffee crop output is forecast to drop between 20 and 30 percent from some 840,000 tons in the 2000/2001 crop due to lower use of fertilizer.

"We found out that some people cut down younger trees at the end of the last crop" but that did not necessarily mean a long- term switch from coffee, said one trader in Vietnam.

He said growers were unlikely to abandon their plantations, but would produce something else as well, like vegetables.

In Sumatra in Indonesia, the robusta harvest that started in April had come to an end with daily arrivals recorded at up to 500 tons this week, unchanged from last week.

The Association of Indonesian Coffee Exporters recently cut its 2000/2001 output forecast to 340,000 tons from 380,000 tons on heavy rains followed by fears of drought in Sumatra.