Vietnam and Indonesia, the two world biggest coffee producers, are to sign a memorandum of understanding (MoU) to reduce each country's coffee export volume by 30-50% in the coming time with an effort to raise up the world prices, according to chairman of Indonesia's Association of Coffee Exporters, Rachim Kartabrata.
The signing is expected during Indonesian President Megawati Sukarnoputri's official visit to Vietnam on June 26-27.
However, the extract figures for the reduction were not announced as the coffee output in both countries is forecasted to be down in the 2002-2003 crop.
Vietnam's coffee output in this crop is estimated to be down by 98,000 tons to 615,000 tons while Indonesia's figure will fall by 125,000 tons to 425,000 tons, due to the prolonged drought seasons and lower crop inputs, according to an industry report.
The report also forecast Vietnam's production to rebound 4-5% in the 2003-2004 crop in the hope of better weather and improved crop maintenance.
The two countries hoped other producing countries such as India and Brazil would participate in a similar deal to help support prices.
World robusta prices nose-dived to a 30-year low in July 2001 and have remained close to the level ever since.
The Association of Coffee Producing Countries (ACPC) tried to stop prices from falling by proposing producers hold back 20% of exportable coffee. That plan was agreed to in May 2000 but scrapped 16 months later because it failed to have an impact.
(Trade Jun 24 p1&3, New Hanoi Jun 23 p3)
Publication: Vietnam News Briefs