Vietnam and RI doubt coffee move

Vietnam and RI doubt coffee move

HANOI (Reuters): Vietnam, the world's biggest producer of robusta coffee, raised doubts on Wednesday about the effectiveness of a proposal to cut exports of low-quality coffee by five percent in an effort to boost prices.

A senior official of the Vietnam Coffee and Cocoa Association (Vicofa) said Vietnam would support the proposal, but it would take some time to convince farmers.

The Association of Coffee Producing Countries (ACPC) plans to vote next week on the plan, which would follow a failing retention scheme in which it called for a withdrawal of 20 percent of exports from the oversupplied market.

"If the plan to retain 20 percent doesn't work, then this five percent plan will go to nowhere," said a senior Vicofa official. "No one wants to buy low-quality beans anyway given current low world prices."

Indonesian coffee exporters have strongly rejected the ACPC proposal and said it would only harm robusta producers such as Vietnam and Indonesia as robusta was considered lower quality than pricey arabica beans.

The Vietnamese official said most low-quality coffee in Vietnam was produced by private farmers, who would need to be persuaded not to release the beans onto the market.

"We would support the ACPC decision, but it will take time to convince farmers," he said.

Although Vietnam is not a member of ACPC, it has retained 150,000 tons of beans, or nearly 20 percent of its 2000/2001 crop's output, to assist the body's efforts to boost prices.

"There's no problem if we have to keep low-quality beans in warehouses," said a state exporter from the coffee-producing province Daklak. "Low quality coffee has its own price, and it can wait."

Vietnam has estimated its 2000/2001 crop output at 800,000 tons. It usually ships about 95 percent of production.