Heavy rains, currency woe hamper RI coffee exports

Heavy rains, currency woe hamper RI coffee exports

SINGAPORE (Reuters): Indonesian coffee shipments are coming out in dribs and drabs as exporters struggle to smooth the cash- strapped distribution chain, traders said yesterday.

They said heavy rains last week also impeded exports as farmers were not able to harvest the crop.

"The distribution chain is not in order yet. There is a jagged movement of exports," said one trader at a local trading house in Singapore.

"There are not enough funds to ensure that there will be a smooth flow."

He said buyers in the domestic distribution chain were having trouble raising funds to pay farmers for their crops.

"Last week there was a lot of rain, which slowed down the crop flow," another trader said.

Traders said daily shipments from Indonesia's main Bandarlampung export center were estimated at about 500 tons, about one quarter of the 2,000 tons shipped during the peak period which should kick in by the end of this month.

Looting and robbery was another factor affecting the coffee flow, they said.

Traders said looters had got away with at least 50 tonnes coffee and merchants sellers who cash in cheques are being robbed, stifling their ability to re-enter the market to buy and sell.

They said trade was also slow because farmers were not pushing to sell, preferring instead to sell only enough to meet their needs due to steady fall of the rupiah.

"Why would they keep rupiah? It's better to keep coffee," a trader said.

Traders said that despite all Indonesia's woes, production for the year was expected to equal that of 1997 at 330,000 tons.

"It should be the same as last year, which was a small crop because of the drought," a trader said.

Traders said interest in Vietnamese coffee was waning slowly as exporters there stretch out the sales of the remaining 10 percent of the last harvest.

Vietnamese sellers were asking around $1,660 per ton fob Saigon for Grade 2, 5.0 percent black and broken, equivalent to about $90 below London futures, they said.

A trader said early this week small lots were sold at $1,630 per ton.

Traders said there about 30,000 tons of beans left as the sellers were not in a hurry, believing the next harvest could be up to 33 percent less due to the drought.

"This is the time for the last 10 percent to be sold. The new crop is three, four months away. The farmers are not in a rush to sell. They will sell some and blend the rest with the new crop," one trader said.