RI coffee exports dampened by heavy rains

RI coffee exports dampened by heavy rains

SINGAPORE (Reuters): Coffee exports from Indonesia were hampered by heavy rains and a shortage of containers while the Vietnamese market turned quiet as most houses covered their prompt shorts, traders said yesterday.

They said prices had firmed and in the floating market differentials to London levels had edged up with Vietnamese coffee now at parity or up to a $10 per ton premium and Indonesia at a discount of between $70-100.

The premiums were an improvement of between $10-50 from last week, they said.

In London, July robusta coffee closed $13 per ton lower to $1,840 on Tuesday.

Indonesia coffee prices rose on supply concerns as the market grew increasingly worried over recent heavy rains which affected the crop's harvest and a shortage of containers leading to slower exports.

"The crop is coming out but the quantity is small. It's pretty low. The heavy rains are affecting the arrivals," one trader at a European house said.

He said only small lots of Grade 4, 80 defects, have been sold recently at a $70 per ton discount to July London prices for nearby shipments and at about $100 for later dates.

Traders said the prevailing shortage of containers was beginning to hurt exports but they were hopeful the situation would resolve itself when shipments moved into full swing in June.

"There is a shortage of containers as there are not many containers going into Indonesia. But coffee is not going into full swing yet so it's not such a big problem right now," another trader said.

Traders said the riots and civil strife in several parts of Indonesia had not affected coffee exports but were concerned that shipments would be affected if the situation worsened.

"Rioting is going on. So anything can happen but so far there problem has not affected the markets," a trader said.

Traders said the Vietnamese coffee market was calm on Wednesday as most houses who were short for prompt product had already covered their positions.

"Up to yesterday, there was a lot of short buying for very prompt shipments. But today, I only hear of one house still in the market looking to cover," a trader said.

Traders said the houses covered at least another 1,000 tons of shorts on Tuesday at $1,840-1,850 per ton free-on-board Saigon basis for benchmark grade 2, 5.0 black and broken.