Asian coffee trade slow as Indonesia holds stocks
Asian coffee trade slow as Indonesia holds stocks
SINGAPORE (Reuters): Coffee prices in Southeast Asia hovered
around their recent levels, but trade was sluggish with
Indonesian farmers reluctant to sell coffee beans because of the
volatility of the rupiah, traders said on Wednesday.
Indonesia is now Asia's main coffee supplier as Vietnam enters
the end of its harvest, but economic and political uncertainties
there have slowed down business, they said.
"There is no room for traders at the moment. Prices in the
West are not good and nothing is certain about currencies here,"
said one trader in Singapore.
Sentiment on the rupiah was weak on Wednesday and it edged
down to 14,800/14,950 to the U.S. dollar in early trade from
Tuesday's 14,600/14,800.
"Most Indonesian farmers are not in a hurry to sell, and at
the same time, there are few buyers. The market is very, very
slow," he said.
In London on Tuesday, benchmark September was last traded $30
firmer at $1,630, but off a high of $1,649, on industry buying
and short covering
But the outlook remained bearish as the expectation of a big
Brazilian crop kept coffee prices under pressure.
Leading Brazilian coffee exporter Unicafe cut its forecast for
the 1998/99 crop by 500,000 60-kg bags to 34.7 million, but still
well above the 21.6 million bags from the 1997/98 crop.
"Demand is thin everywhere," said another trader. "In Asia, if
one kilogram of coffee is the same price as eight kilograms of
rice, what do you think people will buy?"
The only optimistic sign is probably from the Philippines,
which will import more coffee beans this year because of tight
local supplies triggered by drought.
Indonesia's harvest started in May and is expected to peak in
July and last through September, but the social unrest in May and
recent falls in the rupiah made exports slow, traders said.
Traders in Indonesia said between 500 and 700 tons of coffee
beans, compared with around 1,000 tons at normal times, arrived
daily in Bandar Lampung from the plantations.
Indonesia's coffee production is expected to be 330,000
tons, unchanged from last year, because of a severe drought
induced by the El Nio weather phenomenon.