Indonesian coffee crop moves into market focus

Indonesian coffee crop moves into market focus

SINGAPORE (Reuter): Southeast Asian coffee dealers said yesterday the trade is slowly shifting its attention to the upcoming Indonesian coffee crop while regional business remained largely moribund due to sharp swings in world prices.

"Attention is beginning to move to Indonesia," a senior dealer at a Singapore-based commodity house said. "It's early days, but the trade is taking a look at the crop there."

"People are waiting for the Indonesian crop. Some of the beans are trickling in, but this is only February. The crop will only be in full flow in April or May," a dealer for a European commodity house said.

But one senior dealer said business for Indonesian coffee remains non-existent.

"You can buy for prompt shipment, but it's very expensive.

There's hardly any trade going on in Indonesia," he said.

Preliminary estimates for Indonesian robusta beans available for export this season are centering on about 320,000 tons, almost unchanged from last year, traders said.

The country's benchmark Grade 4 coffee, 80 defects, was being quoted by regional traders at US$1,400-$1,450 a ton FOB Lampung against a quote of $1,350-$1,400 a ton on the same basis last Monday.

Indonesia is the world's third biggest coffee producer behind Brazil and Colombia.

In Vietnam, sellers continued to sit on the sidelines to wait for the coffee market to calm down after a recent bout of price volatility in the London and New York futures markets.

"We're stuck," a trader for another European commodity house said. "The buyers think prices will be going down while the sellers believe its headed up. Both of them are not in the market."

Dealers said about one-half to 70 percent of the estimated 270,000-ton Vietnamese robusta crop has either been sold or committed.

About 80,000 to 90,000 tons remain to be sold, most of it apparently in Dak Lak, which produces up to two-thirds of Vietnam's coffee crop.

"There's still a lot of coffee in Dak Lak," a trader said.

Prices for Vietnam's benchmark Grade 2 coffee, 8.0 percent black and broken, were seen by traders at around $1,200-$1,300 a ton FOB Saigon port against a quote last week of between $1,240- $1,300 a ton FOB on the same basis.

The port of Ho Chi Minh was still congested, but the situation was not as bad as in the run-up to Tet Lunar New Year holidays earlier this month, dealers said. Tet was celebrated on Feb. 7 and 8.

"The congestion is still bad, but things are moving. During Tet, almost nothing moved," one trader said.

Some 1,500 tons of the July contract were settled at $1,392 a ton and 1,500 tons of the September contract were also settled at $1,385 a ton. About 1,530 tons of the May contract settled at $1,397 a ton.