Asian coffee mart down due to Indonesian woes

Asian coffee mart down due to Indonesian woes

SINGAPORE (Reuters): International trading houses increased their activities marginally in Indonesia over the past week but local trading firms remained bogged down by financial problems, traders said yesterday.

"Some local exporters have capitalization problems" and were unable to buy supplies from Indonesian producers, said one Singapore trader.

"International houses are slightly more active recently, but not in a big way," he added.

Overall trade was much slower than in previous years during the peak of the harvest season and traders expected prices to continue weakening due to a bearish international market and a big harvest in Brazil.

One trader said up to 50 percent of the Indonesian coffee crop, estimated at 330,000 tons for this year, might have been harvested and one third exported.

"The container shortage problem is not as bad as we expected, but Chinese traders are still worried about their safety, so business has been very slow and prices are not very good," another trader said.

Indonesian coffee merchants, mostly ethnic Chinese, are inactive due to renewed tension in Indonesia where the Chinese are often the target of attacks during social unrest, they said.

"The situation is getting slightly better and some Chinese traders are still in the market. After all, they must collect the beans and do business," one trader said.

Vietnam, which is at the end of its harvest season, has offered small lots of coffee beans, but at higher prices than in Indonesia.

"You can still get a few thousand tonnes of beans from Vietnam if you can pay higher prices," the trader said.

In London on Monday, benchmark September robusta hit a fresh year-low of US$1,520 and ended at $1,532, compared with $1,544 a week ago.

Indonesian supplies were offered at around $150 per ton under London levels, steady from a week ago.

Vietnam benchmark grade 2, 5 percent black and broken beans were seen by the trade at around $110 under, also steady unchanged, but deals were rare.

Indonesia's harvesting comes to an end in September and Vietnam's next harvest kicks in October.