Indonesia’s coffee beans were offered at record premiums of $400 a metric ton to London futures, highlighting worsening supply scarcity in the world’s second-largest robusta producer after Vietnam, dealers said on Wednesday.
The country’s coffee exports could fall about a third to 300,000 metric tons in 2011 as supply constraints led to tight stocks at the end of the year, the Indonesian Coffee Exporters Association (AEKI) said.
“Differentials are getting tighter, but we haven’t seen any deals at $400 premiums for 4-80 defects grade. Supply is also tight in Vietnam and we heard that 2-5 percent black and broken is offered at $240 to $250 premiums,” said an exporter in Indonesia’s main growing island of Sumatra.
“That’s why some exporters want to buy beans from warehouses in London. I’ve got a headache... we can’t get beans.”
Premiums for the Indonesian grade were at $200 above London’s September contract in late June, its highest since late 2009, before steadily rising this month because of scarce export-quality beans.
Vietnam coffee, normally offered at a discount, is now offered at high premiums on tight supply before the next harvest. In late June, the premiums were around $90.
London’s September robusta finished up $23 at $2,173 per metric ton on Tuesday, as a weaker dollar lifted soft commodities, with US lawmakers deadlocked over raising the nation’s debt ceiling to avoid a devastating default.
Supply concerns from Indonesia highlight problems in getting good-quality beans, which sent London robusta prices to a contract high around $2,600 a metric ton earlier this year. The AEKI said Indonesia’s closing stocks at year-end were estimated at 10,000 metric tons, down from a normal level of 60,000 metric tons as domestic consumption was also rising.
“The price is quite ridiculous, actually. Nobody will want to buy at $400 premiums, while for Vietnamese beans, we are still able to get offer at $170,” said a dealer in Singapore, who trades Sumatran and Vietnamese beans.
“Maybe, someone will cover at $200 premiums for the Indonesian grade. $400 premium is a record level, but then again, it’s also not cheap to buy beans from London.”
Harvests in Sumatra usually begin in March or April, but yields are down as farmers have been picking cherries since January after persistent rains caused the flowering season to begin earlier in some districts, dealers said.
June is normally the peak harvest period, but dealers said arrivals from plantations to the main port of Panjang in Lampung on Sumatra have been stagnant since early this year.
In Vietnam, traders said earlier this month that 40,000 metric tons had faced delays, while last week an exporter said the volume must have been higher.
Buyers also faced washouts, or shipment cancellations, in Indonesia, Vietnam’s robusta rival
The country’s coffee exports could fall about a third to 300,000 metric tons in 2011 as supply constraints led to tight stocks at the end of the year, the Indonesian Coffee Exporters Association (AEKI) said.
“Differentials are getting tighter, but we haven’t seen any deals at $400 premiums for 4-80 defects grade. Supply is also tight in Vietnam and we heard that 2-5 percent black and broken is offered at $240 to $250 premiums,” said an exporter in Indonesia’s main growing island of Sumatra.
“That’s why some exporters want to buy beans from warehouses in London. I’ve got a headache... we can’t get beans.”
Premiums for the Indonesian grade were at $200 above London’s September contract in late June, its highest since late 2009, before steadily rising this month because of scarce export-quality beans.
Vietnam coffee, normally offered at a discount, is now offered at high premiums on tight supply before the next harvest. In late June, the premiums were around $90.
London’s September robusta finished up $23 at $2,173 per metric ton on Tuesday, as a weaker dollar lifted soft commodities, with US lawmakers deadlocked over raising the nation’s debt ceiling to avoid a devastating default.
Supply concerns from Indonesia highlight problems in getting good-quality beans, which sent London robusta prices to a contract high around $2,600 a metric ton earlier this year. The AEKI said Indonesia’s closing stocks at year-end were estimated at 10,000 metric tons, down from a normal level of 60,000 metric tons as domestic consumption was also rising.
“The price is quite ridiculous, actually. Nobody will want to buy at $400 premiums, while for Vietnamese beans, we are still able to get offer at $170,” said a dealer in Singapore, who trades Sumatran and Vietnamese beans.
“Maybe, someone will cover at $200 premiums for the Indonesian grade. $400 premium is a record level, but then again, it’s also not cheap to buy beans from London.”
Harvests in Sumatra usually begin in March or April, but yields are down as farmers have been picking cherries since January after persistent rains caused the flowering season to begin earlier in some districts, dealers said.
June is normally the peak harvest period, but dealers said arrivals from plantations to the main port of Panjang in Lampung on Sumatra have been stagnant since early this year.
In Vietnam, traders said earlier this month that 40,000 metric tons had faced delays, while last week an exporter said the volume must have been higher.
Buyers also faced washouts, or shipment cancellations, in Indonesia, Vietnam’s robusta rival
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