Tea auctioning season begins optimistically
JAKARTA (JP): The Joint Marketing Board for all state agricultural enterprises opened this year's tea auctioning season with optimism yesterday.
Sugiat, the president of state-owned PT Perkebunan Nusantara (PTPN) VIII, said yesterday he was confident this year would be more favorable for Indonesian tea exports because potential new markets were opening up and many countries' domestic politics were stabilizing.
He was mainly referring to former Soviet states and countries in Central Europe and the Middle East.
Sugiat said Indonesia would produce more and better tea.
"We hope to see less off-grade tea coming from our domestic producers," he said following the opening of this year's first tea auction.
He said the favorable outlook this year would help tea exporters whose market slumped last year because of political upheaval in many tea importing countries.
PTPN VIII's marketing director, Suwadji Munawar, said domestic tea production dropped to 133,000 tons last year from 141,084 tons in 1995.
About 60 percent of this was exported. Indonesia's major export markets for tea include Pakistan, the United States and Europe.
Sugiat said 2.4 million tons of tea were traded internationally last year.
PTPN VIII and the 13 other state firms overseen by the Ministry of Agriculture sell much of their commodities through the Joint Marketing Board.
In 1995, PTPN VIII produced 62,897 tons of tea, or 44.6 percent of the country's total tea production.
Zaini Taibin, the Joint Marketing Board's managing director, said the results of last year's tea auctions were an improvement on 1995's in terms of quantity and sales.
In a speech which was read yesterday by the board's vice managing director, Asep Toyib, Zaini said 31.6 million kilograms of tea were auctioned last year, up 13 percent on the 27.9 million kilograms auctioned in 1995.
This resulted from better production and the active participation of producers at the auctions.
The volume of tea sold through the auctions increased 67.8 percent from 13.3 million kg in 1995 to 22.34 million kg last year.
Zaini said the big increase resulted from buyers' active participation at the auctions, higher tea quality and lower prices compared to overseas' prices.
The average price of tea sold at last year's auctions was 116.13 U.S. cents a kilogram, up 9.1 percent from 106.45 cents a kilogram in 1995.
Zaini predicted that the country's tea production would continue to rise this year because of favorable markets and better quality.
He said local exporters had a better chance this year because tea production in other countries, except Sri Lanka and Kenya, was likely to drop.
Sugiat predicted this year's average auction price would exceed 120 cents a kg.
Sugiat said the marketing of state enterprises' agricultural products through the Joint Marketing Board was still necessary, despite some external criticism.
Ever since the 27 state firms overseen by the Ministry of Agriculture were merged into 14 firms last year -- namely PTPN I through to XIV -- each firm has had its own marketing director.
This means that each firm can sell its commodities directly to customers.
The vice chairman of the Indonesian Tea Association, Insyaf Malik, said that selling state firms' commodities through the Joint Marketing Board was more efficient.
Insyaf, who is also the production director of West Sumatra- based PTPN VI, said the board was also needed for market information and to administrate the marketing of state firms' commodities.
"Nonetheless, we still need to conduct direct marketing and business negotiations with some of our customers. We don't expect the board to interfere in this," he said.
About 40 percent of the tea produced by state-owned plantation firms is marketed through the Joint Marketing Board's auctions.
The remaining 60 percent is sold directly or traded. (pwn)