Labour Costs Affect Asian Coffee Output

Asia's burgeoning coffee production could be hampered by oversupply and rising labour costs fuelled by strong economic growth, a UN body said in a report on Thursday.

"Asian coffee producers are well on track to double their share of global production from the 1980s to 2000, spearheaded by the significant increase in output in Vietnam," said the Economic and Social Commission for Asia and the Pacific (ESCAP).

"Indeed, it was forecast that Asia's share of production should hit 25 per cent (of global output) by the year 2000, up from 10 per cent in the 1980s," the report said. "This trend was further estimated to be maintained." But there were problems, it added.

 

"These are an oversupply of Asian robusta coffee and higher labour costs caused by Southeast (Asia's) strong economic growth," the report said.

The report was presented at a one-day closed-door meeting of the Asia-Pacific Consultative Forum on Coffee which groups regional producers such as Indonesia, India and Thailand.

The gathering follows a three-day meeting on the tropical resort island of Bali of the 61-member International Coffee Organisation (ICO) which links producers and consuming countries.

Asian countries primarily produce robusta, which is known for its bitter flavour and is mixed with the higher priced arabica in proportions considered a trade secret.

Indonesia is the world's top robusta producer and is third in overall coffee production after Brazil and Colombia. Vietnam is also a major robusta producer, and other regional producers include India, Thailand, Papua New Guinea and Sri Lanka.

The ESCAP report said Asia-Pacific coffee production rose 3.9 per cent to 1.06 million tonnes in 1995 from the previous year.