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Indonesia seeks to recapture U.S. coffee market.

Indonesia seeks to recapture U.S. coffee market

Five years ago, the U.S. was Indonesia's main market, accounting for almost 25% of total coffee exports. This figure has declined from 80,000 tons to 38,000 tons. It is the intention of the Indonesia Association of Coffee Exporters (AICE) to restore the U.S. as Indonesia's principal market.

Indonesia is the third largest producer of coffee in the world, and the first country ever to have exported coffee in commercial quantities to consuming countries.

During the past few years, a new quality standard has been introduced throughout Indonesia, and new grading rules have been agreed upon. For dry-processed, the system operates on the basis of a defective count, giving exporters and buyers a clear reference to the appearance and quality of the coffee being shipped. At the same time, moisture content has been reduced by 1% to ensure that coffee arrives at its destination in good condition. New liquoring panels have been created, and a training program for cup testing introduced.

Quality is a key to expanding Indonesia's U.S. market share. Recent evidence suggests that improvement of overall quality can help in halting a further decline in American coffee consumption. Representatives of the U.S. government and industry have requested that producers supply more Washed Arabica for the gourmet market segment. In response, the Indonesian government and coffee industry have agreed on a program to increase Arabica from current production of 600,000 bags per year up to 1.5 million. Robusta production will remain at present levels as there has been no sign of a reduction in demand for Indonesian Robusta.

The main problem Indonesia has faced in recent years has been the unsatisfactory and inequitable distribution of quota under the 1983 Coffee Agreement. With the introduction of a free market, this problem has disappeared. Indonesia is now building a new industry, allowing supply and demand to dictate quality availability and price. The AICE is concerned about the present low price of coffee and believes that it must rise to ensure adequate availability in the coming year.

AICE supports the U.S. government initiative to allow a period of a free market while maintaining the framework of the ICA. AICE supported the extension to September 30, 1992 of this framework to see if a new Agreement is necessary and if so, whether it could be successful.

In a move to focus on the U.S. market at a time of declining sales and diminishing U.S. coffee drinkers, a delegation of the Association of Indonesian Coffee Exporters (AICE) visited New York for one week, November 21 to 28. Led by AICE chairman Dharyono Kertosastro, the group initiated discussions with key members of the industry as part of the AICE's decision to actively promote Indonesian coffee in the U.S. market. On the agenda were informal discussions, press interviews, and a dinner hosted by AICE to be attended by several hundred coffee industry executives on November 27 at the Waldorf Astoria. Honorary guests included the Junior Minister of Trade, Dr. Sudradjat Djiwandono, Indonesian Ambassador to the United States A.R. Ramly, and Consul General Arkelaus N. Pantow.

PHOTO : Greeting the U.S. coffee industry at the Indonesian fete are: (L to R) Oesman Sodargo, vice chairman foreign affairs; Rachmat Saleh, government advisor; Dharyono Kertosastro, AICE chairman; A.N. Patow, consul general-Indonesia; and Zawawi Soeleiman, chairman, compartment of foreign relations.
COPYRIGHT 1991 Lockwood Trade Journal Co., Inc.
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Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1991
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