SE Asian coffee trade quiet as roasters slow

SE Asian coffee trade quiet as roasters slow

SINGAPORE (Reuter): The Southeast Asian coffee business was quiet as buying by roasters slowed ahead of the summer period while the supply of robusta beans from Indonesia was said to be steady, regional dealers said yesterday.

"All the buying by the roasters in the West has slowed down. Summer is coming up and consumption normally comes off at this time. The roasters also did a lot of buying during the recent rally," a dealer for a Singapore-based trading house said.

Another trader said buyers were reluctant to come in due to the steep offer prices being quoted by exporters in Indonesia and were waiting for the bulk of the crop to come in next month.

Indonesia's key Grade 4 coffee, 80 defects, was being quoted by the trade at around US$1,400-$1,450 a ton FOB Lampung against last week's $1,350-$1,400 a ton on the same basis.

"The Indonesian prices are very high," one dealer said. "People are sitting back. Anyway, the bulk of the crop will come in full bore between May and July."

"I don't think much has been done although the beans from Indonesia are coming in at a steady basis. People are waiting for the rest of the coffee to come in," another said.

Dealers estimate that about 105,000-110,000 tons of coffee from Indonesia has been sold or committed against 100,000 tons last week. Total exports are seen reaching between 230,000- 270,000 tons this season.

Coffee was coming in from Indonesian farms at the rate of about 500-600 tons a day, traders said.

"I heard that some of the exporters there have sold beans through to July. The amount sold or committed today should easily exceed 100,000 tons," a trader said.

Regional dealers were still uncertain about the extent of any fall in Indonesia's coffee crop.

"I think it's still 20 percent down," one trader said. Oesman Soedargo, chairman of the Association of Indonesian Coffee Exporters, said two weeks ago the crop could be 30 percent down with exports in 1997 tipped to fall to 220,000 tons from 300,000 tons last year.

Dealers said there was also talk circulating in the market that a major trading house bought about 40,000 to 50,000 tons of Thai coffee and stored the beans in New Orleans.

"I think they're holding onto part of that coffee because prices have come off recently. I just wonder how they're financing it though," one dealer said.

The coffee business in Vietnam, Asia's second largest coffee producer, was also quiet with exporters now waiting for the next crop to come in sometime in November.

"Most of the coffee there is still in the hands of the farmer," a trader said. "I won't be surprised if they still have over 70,000 tons of coffee."

Other dealers, however, pegged the amount of coffee remaining in Vietnam at around 40,000 to 50,000 tons.

Prices of Vietnam's Grade 2 coffee, 8.0 percent black and broken, were seen by the trade at around $1,350-$1,400 a ton FOB Saigon, compared with last week's quote of $1,325-$1,400.

London robusta prices are tipped to open unchanged to slightly lower later on Wednesday. "It's due $20 down purely on the numbers. Technicals are not looking good," a dealer said.

Trading in the robusta coffee contract on the Singapore Commodity Exchange (SICOM) reached a paltry 400 lots on Tuesday. The 400 lots of the September contract settled at $1,539 a ton, SICOM said.