RI coffee shipments still too small: Traders

RI coffee shipments still too small: Traders

SINGAPORE (Reuters): Indonesian coffee shipments are making their way into the market but the small quantities are not helping to relieve tight supplies, Asian traders said yesterday.

"I've got few shipments from Indonesia already, but in very small quantities. The market is still pretty tight," said one Singapore-based trader with a European house.

"The main crop will reach the market between late May and early June," the trader said.

Another trader with a local house said supplies from middle and northern Sumatra could reach the market in May while more would arrive in June. Supplies from Java could arrive in July and August.

The current harvest has been delayed to May from April because of the El Nino-linked drought last year.

Indonesia, which has been the world's third largest coffee producer, is expected to keep its coffee output unchanged at 330,000 tons this year from last year.

Indonesian grade 4, 80 percent defects, coffee was assessed by the trade at $120-$170 per ton under London, while May futures firmed $10 to $1,992 on Tuesday.

In Vietnam, suppliers continued to hold their stocks in the face of high international price levels, traders said.

Very few deals have been heard done, at about $70-$75 per ton under May, one trader said.

Vietnamese supplies traditionally hold a discount of $200 under London.

"As levels in the local market are so high, there is almost no buyer for Vietnamese coffee," the trader said.

Only European houses in very tight positions looked for Vietnamese supplies, traders said.

Traders still saw delays in Vietnamese deliveries as exporters could not get beans from Vietnamese growers who raised their prices following high levels in London.

The exporters closed the deals earlier at lower levels. However, most traders did not see a major impact on the market from the delays.

Estimates for Vietnam's coffee output from the last crop vary. The government forecast output at around 380,000 to 400,000 tons, which would have made Vietnam the world's leading exporter.

The figure was later revised to 320,000 to 340,000 tons. The general director of the Vietnam Coffee Corporation (Vinacafe) Thai Doan Lai said there were still 100,000 tons of coffee stocks in Vietnam.

Some 220,000 tons of coffee have been exported so far this year, he told Reuters in Vietnam.

Asian traders have voiced growing concerns over a prolonged drought in Vietnam.

"There is no indication how seriously the drought will affect the next crop but it has started to affect people's life there," said one trader.

Vietnam's next harvest is due between October and December. "If it continues or we see fewer rains, the coffee flowering will definitely be affected," the trader said.

It is now the dry season in Vietnam and heavy rains normally commence between late April and May.

Vietnam produces mostly robusta coffee, used widely in the instant coffee industry. It has emerged as a major world exporter of the commodity in recent years.