RI coffee supplies very tight: Traders

RI coffee supplies very tight: Traders

SINGAPORE (Reuter): Indonesian coffee supplies are tight while
business for some trading houses who are long on coffee was said
to be active, traders said yesterday.

"The supplies from Indonesia are terrible," a senior trader
for a major coffee house said. "The arrivals in Lampung are only
averaging about 200-300 tons a day as opposed to the normal 800
to 1,000 tons. That's exceptionally low."

Traders were divided on the reason behind the tight supplies.
One said strong winds and rain which stripped coffee trees of
their flowers last year was behind the fall in production.

"The crop is down by about 20-25 percent," the dealer said,
adding the carryover this year for Indonesian coffee is expected
to reach only about 60,000 to 70,000 tons against the estimated
100,000 tons last year.

Another senior trader said there were also rumors that a
shipment of about 30,000 to 40,000 tons of robusta beans to a
North African country temporarily squeezed supplies.

"The situation should clear up by the end of the month," the
dealer said.

"I've heard rumors of defaults. Fortunately, it's the summer
holiday season so it's not showing up in the market," another
trader explained.

Most dealers said the Asian coffee business was quiet, except
for some dealing houses who reported that roasters who were short
are coming to them to book their purchases for forward delivery.

"Some of these houses are coming to us because they're very
short of coffee. We've been very conservative in selling but
pretty aggressive in buying," one trader said. "There are trade
houses and roasters who need to cover now."

The rest of the coffee business, though, was quiet.

"The general coffee trade is quiet because of the summer
holiday season in the United States and Europe. It will probably
remain this way for quite a while," one dealer said.

Indonesia's key Grade 4 coffee, 80 defects, was quoted by the
trade at around US$1,635/85 a ton FOB Lampung against about
$1,650 a ton on the same basis last week.

Price indications for Vietnam's Grade 2 coffee, 8.0 percent
black and broken, ranged from $1,535-$1,705 a ton FOB Saigon.

No deals have been reported however as very little coffee is
said to remain in the country, dealers said.

"People are waiting for the next harvest in November. There's
nothing moving in that market," one said.

Regional coffee dealers expect the London robusta market to
open slightly higher later on Wednesday in seasonally dull trade.

"By the numbers, it's due $60 up. I'm calling it $30 up," a
trader said.

Another dealer pegged London to move "about $50 higher."

The September robusta contract in London moved largely
sideways on Tuesday before ending the day $8 up at $1,785 a ton
after bouncing between $1,822 and $1,762.

The robusta coffee contract in the Singapore Commodity
Exchange (SICOM) was untraded anew on Tuesday.

The July contract was indicated at $1,610 a ton while the
September contract settled at $1,603 a tone.