Bangalore, June 7: India's Coffee Board is considering options to retain coffee in line with a global plan to raise prices even as India's coffee exports in 1999-2000 (April-March) grew nearly 13 per cent to a record 238,459 tonnes. Officials at the state-run board said it had drawn up three plans to hold back coffee under its commitment to the Association of Coffee Producing Countries (ACPC), but faced opposition from exporters who were against the plan to hold back supplies.Last month, the 14-member ACPC, backed by five non-member producers, agreed to retain 20 per cent of coffee exports in an effort to push up world prices, which have fallen between 30 and 40 per cent since December to eight-year lows.
A Coffee Board member said the board would leave it to the government to pick one of the three plans before June 16 when it has to submit the plan to the ACPC.
"With no ACPC-member country having made its retention plan public, we are waiting for someone to make the first move and submit the plan so we know this whole thing is being taken seriously," the board member told Reuters.Under the first plan, coffee will be bought and retained by the state-run State Trading Corporation (STC) until prices move above the ACPC benchmark of 95 US cents per pound.
Under the second plan, the domestic Coffee Futures Exchangeof India (COFEI) would facilitate the retention of stocks at recognised warehouses.Growers would pay for the cost of retention, but would be allowed to hedge on the stocks at COFEI for delivery not before January 2001.
The third plan proposes the buying of coffee by leading coffee firms at a price higher than current market levels but below 95 cents per pound.
Any increase in prices will allow the firms to make profits while losses from a further price fall will be compensated by growers."Whichever plan the government picks, it will not foot the bill for retention and growers will have to pay as they are the ultimate beneficiaries," the board member said.India grows about four per cent of the world's coffee and exports nearly 75 per cent of its output.Earlier on Wednesday, the Coffee Board said the country's exports in 1999-2000 (April-March) increased to a record 238,459 tonnes from 211,623 tonnes in the previous year.
India is forecast to produce 282,000 tonnes of coffee in 1999-2000 (October-September), 119,000 tonnes of arabica and 163,000 tonnes of robusta.But the retention plan has been opposed by India's Coffee Exporters Association (CEA) which in a letter to the commerce ministry called retention a "retrograde" step.
"Since our principal competitors Vietnam and Indonesia are not sure of participating in the plan, we will end up handing over our market to them on a platter," CEA president Ramesh Rajah said in the letter, a copy of which was obtained by Reuters.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.