El Nino phenomenon affects RI coffee trees

El Nino phenomenon affects RI coffee trees

SINGAPORE (Reuter): A drought linked to the El Nino weather phenomenon is blistering Indonesian coffee trees, boosting concern that the 1998 crop will fall and there may be quality problems, regional dealers said yesterday.

"We don't expect a good crop," said a dealer for a U.S. commodity house. "This El Nino-related drought is becoming more of a concern for the trade. We haven't seen any significant rain the past two months. The trees are being stressed by the heat."

"If we don't get rain soon, the quality of next year's crop is going to suffer," said a dealer for a Singapore-based trading firm.

Regional traders discounted reports that some Indonesian exporters believe the rains will reach the coffee farms in September and help ensure a good crop. Indonesia is the world's third biggest coffee producer after Brazil and Colombia.

"That's really wishful thinking on their part. We need to see the rain come in. There are still no rains and the drought is beginning to bite," a dealer said.

Indonesia's coffee production fell by around 30 percent this year to about 270,000-290,000 tonnes and some dealers fear the drought may cause a further drop in output in 1998.

The dry spell was spawned by El Nino, a weather phenomenon caused by formation of an abnormal warm water current off the western coast of South America.

Meteorologists say this year's version has arrived early and could rival the century's worst in 1982-1983, when drought zapped crops in Indonesia, Australia, the Philippines and South Africa.

Traders said the flowering cherries on Indonesian coffee trees may shrivel and produce abnormally small beans if the drought is not broken by the arrival of timely rains.

"The flowering period is almost done. It looks pretty bad," a dealer said.

In Vietnam, steady rainfall was reported in the main coffee producing province of Dak Lak while too much rain fell in the southern part of the country. Dak Lak harvests about two-thirds of all the coffee produced in the country.

The crop is coming along well and Vietnamese robusta production is expected to rise 10 percent in the 1997/1998 Nov/Feb season to 300,000-320,000 tonnes.

"Vietnam is going OK. Dak Lak is fine," a dealer said.

Some deals were reported for lower-quality Grade 6 Indonesian coffee and for Vietnam's benchmark Grade 2 coffee, 8.0 percent black and broken, dealers said. Indonesia's key coffee is the Grade 4, 80 defects, brand.

"I'm sure some deals were done for Vietnamese coffee, but we're just really waiting for the roasters to come back from the summer holidays," a trader said.

Another dealer said: "There's really very little business being done at the moment. We're waiting for September and the winter buying period."

Asian coffee dealers said they expect the London robusta market to open about $30-$40 higher later yesterday.

"London will go up by about $30 to $40. It seems pretty quiet for now," one said.