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Philippines heed call for Asian coffee block.

Philippines heed call for Asian coffee bloc

The Philippines appears headed for membership in the proposed Asia-Pacific coffee group which had been proposed by Indonesia back in 1983.

This proposed ASPAC bloc is expected to be composed of Indonesia, Philippines, Thailand, and eventually, India and Papua New Guinea. The formation of the bloc has recently gained support from these countries after good performance of coffee exporters from Thailand and Indonesia.

Antonio Reyes, director of the Philippines' International Coffee Organization certifying agency, has met with representatives from many of the bloc's proponents to formalize the group. The talks were held in Jakarta, Indonesia.

Reyes said formation of the ASPAC coffee group have been necessitated by the region's need to protect its industry vis-a-vis those of other producing and exporting countries, and to obtain a seat in the ICO, to represent the members, especially in the negotiations for world prices and imposition of the quota system.

The envisioned Asia-Pacific coffee bloc is expected to coordinate very closely with diplomatic channels to gain wider support and acceptance in the world market.

In a related development, trade secretaries from the six countries composing the Association of Southeast Asian Nations (ASEAN) met in Bali, Indonesia last October to organize an ASEAN trade bloc in preparation to becoming a regional common market.

The ASEAN common market has been expected to have closer economic cooperation with the European Community's single market.

Meanwhile, five Russian companies have indicated interest in setting up joint venture projects with Filipino coffee roasters. The firms and their representatives are: Farukh G. Nahmedov, head of section of coffee and coffee products, Moscow Food Enterprises; Alevtina V. Kaushanskaja, expert of the main administration of state food resources, Ganna Cherednichenko and Nadezhda Nosova of the Glavniy Technology of combinat Putshevych Concentratov Odessa. The Russian businessmen offered to provide machinery, equipment, raw materials and coal in exchange for coffee beans or finished coffee products from the Philippines. Under the joint-venture proposal, the Russians are willing to provide new technology and equipment to local coffee roasters who are expected to provide the land, factory and raw materials.

These proposals were presented to Antonio Reyes, local ICOCA director, and Emilio Custodio, Jr., president of the Coffee Exporters Association of the Philippines, during bilateral trade consultations with Eastern European importers in connection with a workshop on "Possibilities for expansion of trade in coffee between developing countries and countries of Eastern Europe" under the the auspices of the United Nations Conference on Trade and Development, held in Moscow last October.

Reyes also expected Philippine coffee exports this year to decrease by 60% from those of 1989, primarily because of the continued imposition of the non-quota system on coffee products by the ICO and the increasing local consumption.

As of the end of September 1990, Philippine coffee exports registered only $5.86 million, or a total of 137,707 bags, compared to about $37 million for the same period in 1989. Total export value of soluble coffee alone went up from 157 metric tons worth $586,00 for the whole year 1989 to 218 metric tons valued at $694,000 from January to September 1990 only.

Reyes said local coffee consumption has increased by 10% over last year's 50% of total coffee output.

The country increased exports of coffee to non-ICO members, like Brunei, Republic of Keribati, Malysia, Micronesia, Oman, New Zealand, Hong Kong, Solomon Islands, Taiwan, United Arab Emirites, and Vanuatu.

As of September 1990, exports to these countries reached 12,276 bags worth $869,789.
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Author:Palacpac, Orlino Sol.
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1991
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