India urged to hold back part of coffee export

By Our Special Correspondent

NEW DELHI, SEPT. 15. The Association of Coffee Producing Countries (ACPC) has urged India to hold back 20 per cent of its coffee meant for export to arrest the declining international price of coffee.

An ACPC team led by its President, Mr. Sergio Amaral, met the Union Minister of State for Industry, Mr. Omar Farooq Abdullah, and Minister of State for Finance, Mr. S. Dhananjay Kumar, and sought their support on Thursday. They will meet with the Coffee Board officials at Bangalore tomorrow.

Speaking to mediapersons, Mr. Amaral said coffee prices had dipped to half within a year threatening to go below the cost of production.

To revive the price and bring it to a level of 95 cents per pound, the ACPC has drawn a retention plan urging member countries to hold back 20 per cent of their exportable surplus for as long as it takes. Once prices pick up, the ACPC will release the coffee in phases. Meanwhile, it will monitor the member countries as to whether they have indeed kept back quality produce. The plan has been approved by 14 member countries and five new members. They will meet in London on September 28 to review the progress of the plan.

``Supply has overridden the demand and some countries have held stocks for speculation, leading to such a situation,'' Mr. Amaral said. Global traders and multinational companies control half of the world trade of coffee. Five companies process 40 per cent of the coffee of the world.

According to him, a retention plan was enforced in 1993 too when it took six months for prices to recover.

After the coffee price picks up, the ACPC will go in for a strong promotional plan, especially in new consumer countries such as China and Russia.

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Section  : Business
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