Asian coffee market nudging back to life but prices fall
Asian coffee market nudging back to life but prices fall
SINGAPORE (Reuters): Coffee trade in Asia is slowly coming
back to life as social unrest gradually comes to an end in
Indonesia, one of the region's main coffee producers, traders
said.
But prices are falling in tune with lower levels in London and
Vietnamese trading houses have cut their offers to sell stocks
before the main bulk of Indonesian crop hits the market, they
said.
"Vietnam is losing its advantages. Vietnamese can no longer
dominate the market. They are quite happy to sell now, unlike in
the past few months," said one trader at a coffee trading house
in Singapore.
Before Indonesia's crop started to hit the market in May,
Vietnam was Asia's main coffee supplier and traders there held
back stocks waiting for higher prices.
"The Indonesian crop is coming all right despite riots last
month. There are small lots of offers and more will be on the way
later this month," said the trader.
Indonesia's harvest was delayed by a drought triggered by the
El Nio weather phenomenon, which also affected the output of
other commodities such as rubber, cocoa and rice.
Indonesia's coffee production is expected to reach 330,000
tons in 1998, unchanged from last year.
Offers from Vietnam were heard at around $60/$90 a ton under
London levels, compared with a discount of about $40 a week ago.
In London on Tuesday, benchmark July futures ended Tuesday at
$1,763 a ton.
Coffee trade in Indonesia came to a halt in mid-May when
bloody riots erupted there and traders, mostly ethnic Chinese,
fled for safety.
Despite signs of increasing political stability in Indonesia,
many traders said they were still worried by the uncertain
economic situation.
The market was also quiet in Thailand, traders said.
Some exporters there said this season was a bad one as some of
them had committed to sell when the baht plunged to a historic
low of 56.90 per dollar in January but received payments only
when the currency firmed to 40 per dollar.
Main markets for Thai coffee are the United States, South
Korea and Japan.