Foreign traders have increasingly become dominant in purchasing local coffee products for exports, a trend that could undermine local exporters, said Chairman of the Indonesian Coffee Exporters Association (AEKI), Suyanto Hussein in Medan, North Sumatra, on Thursday.
He, however, did not provide figures to support such claim. Indonesia is the world's third largest coffee producer, mostly of the Robusta variety.
He said that the foreign traders could obtain cheaper working capital abroad due to lower interest rate, while local traders are burdened with the high interest rate environment at home.
“The foreign businesses can easily buy local coffee beans at higher prices,” he said, while adding that unlike local traders, the foreigners are not required to meet various conditions and requirements to get exporting license.
“The foreign traders come in, bring dollars, rent a temporary warehouse, and then export the beans. In contrast, local businessmen (traders) are required to make certain investment and burdened with various fees,” Suyanto said, without giving details.
AEKI urged the government to help in pushing the domestic banking industry to lower the interest rate environment. (rei)