RI's coffee belt still parched

RI's coffee belt still parched

SINGAPORE (Reuters): No rains fell over the parched Indonesian coffee belt over the last 24 hours and the drought will not ease anytime soon, regional dealers said yesterday.

"The weather's pretty bad. It's very dry. The flowers and the cherries on the coffee trees are not doing well," a dealer said.

"It is very dry in Indonesia. It's very serious," another trader agreed.

Showers fell in the main coffee belt of Lampung, Bengkulu and South Sumatra last week, but have since stopped completely. The area produces up to 70 percent of Indonesia's total production of coffee.

The coffee crop in Indonesia has been battered by a drought stemming from the El Nio weather pattern.

Regional traders forecast coffee output in the country will probably fall to around 300,000-350,000 tons in 1998 against production of about 450,000 tons in a normal season.

Production this year is likely to reach only 300,000 tons after rains and winds pounded the coffee trees last year.

"At best, the crop next year will be the same as this year," a dealer said.

Far East coffee dealers said robusta futures prices in London would probably be unchanged to $30 lower when the market opens later on Tuesday.

LIFFE coffee futures sank more than 5 percent on Monday as the trade was hammered by heavy fund long liquidation and arbitrage selling, dealers said.

"It's probably going to be unchanged to $30 lower," one dealer said.