Subject: Re: Asian Softs 2/26
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Mon, 26 Feb 2001 09:46:00 -0800 (PST)

Are the amounts below you've outlined (in tons) significant in this market, 
and in their local markets?  Jeff

	Robert Johnston
	02/26/2001 01:33 PM
		 
		 To: Gary Hickerson/HOU/ECT@ECT, Jeffrey A Shankman/HOU/ECT@ECT
		 cc: Elsa Piekielniak/Corp/Enron@Enron, Billy Lemmons/Corp/Enron@ENRON, 
Darren Maloney/Corp/Enron@ENRON, Trena McFarland/NA/Enron@Enron, Erin 
Willis/HOU/ECT@ECT
		 Subject: Asian Softs 2/26

INDONESIAN COFFEE- STRONG BEARISH- FUNDS LACKING FOR RETENTION

The Finance Minister, Prijadi Praptosuhardjo IS saying that the government 
has no
money to finance the retention plan.

According to a source close to AEKI, the government has not contacted the
association at all. Another possible sore point is the interest rates
charged by the banks for coffee retention. So far there has been no
indication that favorable interest rates will be extended to AEKI. Some are
concerned that the rate will be higher than that charged by the private
banks. Due to the tension which exists on these issues, AEKI has threatened
the government that if the money is not chanelled before April they will
release 10,500 tons of coffee in their retained stock from the warehouses in
Lampung and Medan.

There are people who believe that 10,500 tons is "just the tip of the
iceberg." There is more than 7,500 tons in stock in Lampung alone, according
to an important domestic farmer in Lampung,  who is close to our source. In
fact the farmer estimates that Lampung itself has more than 10,000 tons and
there are another 4,000 to 5,000 tons in Medan.

VIETNAM COFFEE- STRONG BEARISH- VIETNAMESE DUMPING "PHANTOM STOCKS" IN 
NEIGHBORING MARKETS

Our primary source comments that in his opinion, it may be true that there
are additional stocks over the 150,000 tons as reported. Cambodia has been
used as a dumping ground for Vietnam's extra quota sales.

Upon investigation, our source learned that it is true that there are some
excess stocks stored in Vietnam. He was informed by a source that the
Vietnamese plan to release the stocks into Cambodia and also China to sponge
up the excess supplies. They command a fixed price in the black markets of
those countries and provide much needed foreign exchange to the Vietnam
government. The secondary source said that this is common practice for
Vietnam and they have done this for other cash commodities like Cashewnuts.
The source does not know the exact figures, but estimates the excess to be
30,000 to 40,000 tons more than what has been acknowledged by the
government.