Indonesia plans to provide 200bn rupiah (US$21.4m) to buy coffee beans as part of a global plan by growers to restrain exports and boost prices.
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The country, the world’s fourth-largest coffee producer, will buy as much as 40,000 metric tons of beans by August, or one-fifth of the expected production of 200,000 tons expected in the 11 months to Aug. 31, the Ministry of Agriculture announced.
“The government is ready to provide 200 billion rupiah in credit from (state-owned) Bank Mandiri to fund the retention,'” said President Wahid after meeting with Brazil’s President Fernando Henrique Cardoso in Jakarta.
Brazil and Thailand are members of the Association of Coffee Producing Countries that proposed restraining exports by 20% beginning last October to raise prices from close to their lowest levels in seven years. Indonesia finally agreed to join the plan after problems on how to finance its share of the stockpile were solved.
Coffee for March delivery rose US$2.95 cents, or 4.3%, to US$71.25 cents a pound on the Coffee, Sugar & Cocoa Exchange in New York yesterday, on expectation growers would step up efforts to trim exports. Prices are down 36% from this time last year.
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