Coffee price firm on Indonesian fears
Coffee price firm on Indonesian fears
LONDON (Reuters): LIFFE robusta futures firmed in quiet trade yesterday morning on continued concern over Indonesian unrest, traders said.
Benchmark July beat its opening call of unchanged to US$10 lower and opened $40 up but then idled through the rest of the session, trading in a $19 range.
It was just off its highs, $55 up at $1,935, at the break, accounting for 739 of the 1,219 lots traded.
"It opened scary because of Indonesia but then did nothing," a trader said.
Technical analysts said earlier that coffee futures could fall further after Friday's sharp fall reversed its recent strong gains.
"It has come down so fast I would have said it has done enough in the very short term, but in the longer term there could be more slippage," said Susan Rigg of Chart Analysis Ltd.
"Today we could see a dead cat bounce," she added.
CSCE coffee futures ended broadly lower on Friday, pressured by scale-up origin selling and local long liquidation.
Indonesia's commodities market were gripped on Monday by fears sparked by last week's riots and traders said they saw no signs of things improving soon.
"We just don't have any idea if the situation will get better," a coffee trader said.
Banks reopened on Monday, but many traders did not show up at their offices. Cities were reported calm but nervous as many Indonesians returned to work, watched by patrolling troops and armor.
German statistician F.O.Licht said on Monday in its second estimate for the current season that world coffee production will fall to 90.55 million bags in 1997/98 from 102.04 million bags in 1996/97.
Its first 1997/98 estimate, in November, was 98.80 million bags.
Licht said both arabica and robusta production will not meet earlier expectations with arabica production now put at 59.52 million bags down from 66.22 million in 1996/97 and compared with its first estimate of 64.58 million.
Robusta output in 1997/98 was estimated to fall to 31.04 million bags from 35.82 million in 1996/97. Its first estimate had been for a robusta crop of 34.22 million bags.
The Coffee Board of Kenya on Monday posted 1997/98 output at 60,000 tons, blaming adverse weather and a scarcity of farm credit for a slip from 63,000 tons in 1996/97, and taking a cautious view for 1998/99.
"Coffee production has been an area of great concern to my board. We will need the concerted efforts of all of us (in the industry) to arrest this sad situation," Chairman John Ngari said.
In Vietnam, good rains have finally broken in the key coffee growing province of Daklak, where a severe drought has affected up to a third of the crop, a meteorologist and foreign traders said on Monday.
But Mexico is suffering its worst drought in 70 years, and a series of forest fires threatens to turn the southern part of the country into an environmental catastrophe, officials said on Sunday.