Jakarta, Mar 30: Indonesia has stopped importing robusta coffee beans from Vietnam because of high costs while local prices have generally softened following a stronger rupiah against the US dollar, traders said on Monday."I believe there will be no more imports from April onwards because it has become too expensive to do that when the rupiah is still weak," said one trader.
"Vietnamese coffee beans which have come to Indonesia were purchased before the dollar rose. Vietnamese coffee is mostly allocated for spot deals and I don'T think people dare to do it now," said the trader.
Newspapers reported last week Indonesia imported 30,000 tonnes of robusta coffee beans from Vietnam until March this year because of a shortage in local supply. Traders confirmed the report.
Bisnis Indonesia newspaper quoted an unnamed official at the Indonesian Coffee Exporters Association (AEKI) as saying the country had to import the Vietnamese coffee because many local players had exported the commodity to take advantageof the strong US dollar.But traders said on Monday imports would be expensive nowadays, adding that local consumption had dropped by 30-35 per cent because of the currency crisis.
Usually, Indonesians consume about 120,000 tonnes of coffee a year. This year's coffee output is expected be about 330,000 tonnes.
"I don't think people can afford to import coffee whether or not local stocks are enough to meet the local demand," said one trader.
The rupiah was quoted at 8,525/8,675 against the US dollar. It was quoted at 2,400 last July.
Traders said prices of grade four robusta beans were quoted at 12,000-12,500 rupiah/kg in Lampung against 14,000-14,500 rupiah/kg last week.
Indonesia's currency crisis, in which the rupiah has plunged about 70 percent against the dollar since last July, has sparked an increase in prices of basic essentials and food riots had rocked several parts of the archipelago.
Traders said Indonesians, mostly those living in rural areas, had trimmed their coffee consumptionbecause of the rising prices of other essentials.They said steady rains had fallen in the key-growing areas of South Sumatra, Lampung and Bengkulu, which account for 70 percent of the country's coffee output.
Coffee is also grown in North Sumatra and the eastern islands of Bali and Timor.
"Rains are stable in Sumatra. I don't see any problem with weather." The hot issue in the market is the currency. Exporters have to closely monitor it because they have to make calculations," said one trader.
He said Indonesia's coffee output was expected to reach330,000 tonnes in 1998, unchanged from last year, adding that around 270,000 tonnes would be exported to Europe, the United States and Japan.
Indonesia last year experienced a severe drought, triggered by the El Nino weather phenomenon, which affected most of the country's crops, including rice, coffee and cocoa.
The drought has caused a delay in coffee harvest, usually done in April.
The harvest is now expected to start in May.
Officials atIndonesia's Space Agency (Lapan) said last week the El Nino was expected to ease in April and end by May and no longer affect weather in Indonesia.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
