RI coffee relieved as beans flow

RI coffee relieved as beans flow

JAKARTA (Reuters): Indonesian farmers and middlemen have started to release coffee stocks on the back of firmer prices, bringing some relief to exporters scrambling for beans to cover nearby commitments, traders said on Monday.

They said farmers needed the cash and were lured by the stronger prices, driven up by the recent weakening of the rupiah against the U.S. dollar.

They said differentials had also returned to more realistic levels of US$50-$80 a tonne under London's benchmark futures' contract.

For the past two weeks, differentials have been quoted at par to $20 per tonne above London.

"The market is not yet normal but at least everybody is trading at the same range and there are beans to be bought," said one trader in Bandar Lampung, the provincial capital of the growing hub of Lampung.

LIFFE's robusta benchmark November ended $8 down at $434 a tonne on Friday. January closed $8 down at $447 a tonne.

Grade four robusta beans were quoted at Rp 3,500 - Rp 3,600 (US$0.372) FOB Bandar Lampung on Monday, up from Rp3,400 last week.

Local coffee prices almost halved to Rp 2,800 per kilogram in early September from around Rp 4,800/kg in July.

Traders in Sumatra estimate middlemen in the provinces of Lampung, South Sumatra and Bengkulu -- which account for 75 percent of Indonesia's coffee output -- are still holding around 20,000 tons of beans from the last harvest which finished in August.