Indonesian coffee supplies tight as traders seek higher prices<\/p>\n
SINGAPORE (Reuter): Indonesian coffee supplies are very tight
\nwith several exporters hanging onto their beans in the hope of
\nseeing higher prices, while a sharp fall in output is aggravating
\nthe situation, traders said yesterday.<\/p>\n
Exporters who bought coffee from Indonesian farmers when
\nprices were hovering near their peaks at US$2,600 a ton FOB
\nLampung a few months ago have bulked at selling coffee at current
\nlevels of around $1,555-$1,655 a ton, they said.<\/p>\n
\"The exporters are sitting on the coffee. They bought the
\ncoffee when it was at $2,600. They don't want to take a loss,\" a
\ndealer said. \"Some of the coffee is beginning to come out, but
\nvery slowly.\"<\/p>\n
The tightness in supply is compounded by an expected 30-40
\npercent drop in Indonesian production of robusta beans to around
\n290,000 tons this year.<\/p>\n
A few dealers are also beginning to fret over the drought in
\nIndonesia, the world's third biggest coffee producer after Brazil
\nand Colombia, which is believed to be linked to the El Nino
\nweather phenomenon.<\/p>\n
\"It looks pretty bad. The cherries (on the coffee trees) will
\nshrivel if there's too much heat. It hasn't happened yet, but
\nsome people are becoming very worried,\" one said.<\/p>\n
Most of the trade, however, said it is premature to say if the
\n1998 Indonesian coffee crop will be hit by drought.<\/p>\n
\"Some people may just be trying to talk up the market with the
\nprice so low. It's too early to be worried about the dry
\nconditions,\" one trader said.<\/p>\n
\"It's dry, but it's just not a concern yet,\" a dealer added.
\n\"If it lasts three weeks or more, then we'd be worried.\"<\/p>\n
The El Nino, named after the Christ child, occurs when warm
\nwater appears off the western coast of South America and wreaks
\nhavoc with world weather patterns.<\/p>\n
The century's worst El Nino in 1982\/83 caused withering
\ndrought in Indonesia, the Philippines and Australia.<\/p>\n
The robusta crop in Vietnam is coming along fine with a
\nhandful of trading houses clinching some small deals for its
\nbenchmark Grade 2 coffee, 8.0 percent black and broken.<\/p>\n
\"There's small parcels of Grade 2 being done out of Vietnam,
\nbut the numbers are very small and negligible,\" a dealer said.<\/p>\n
Vietnam's robusta exports are expected to rise in the 1997\/98
\n(November\/February) season by about 10 percent to 300,000-320,000
\ntons, which would allow it to overhaul Indonesia as Asia's
\nleading coffee exporter.<\/p>\n
Robusta coffee is more bitter in taste than higher grade
\narabica and is used extensively in instant coffee.<\/p>\n
Asian physical coffee trade is quiet due to the summer holiday
\nperiod in they major U.S. and European markets.<\/p>\n
\"The buyers are away and you're in between crops. It's going
\nto be quiet,\" one trader said.<\/p>\n
The London robusta market is also expected to remain quiet
\nalthough it could produce surprises after New York arabicas
\nposted strong gains on Tuesday.<\/p>\n
\"I wouldn't be surprised if it suddenly woke up,\" a trader
\nsaid. \"The betting though is that London will be quiet.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesian-coffee-supplies-tight-as-traders-seek-higher-prices-1447893297",
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