JAKARTA, March 25, 2011 - Some coffee exporters have delayed shipments of Vietnam's robusta beans to avoid losses after fixing prices too low, while concern about a small harvest have kept Indonesian traders on the sidelines, dealers said on Friday.
London's May robusta coffee contract hit a 3-year peak of $2,661 a tonne last week on a possible shortage of available supplies to deliver against the May contract but it has eased to $2,608 a tonne on Friday.
"We are hearing serious delay from exporters who have fixed contracts because the prices were set $2,000 a tonne while London's price is already above $2,500 a tonne," said a regional trader in Singapore.
"Some international trading houses have not received shipments for their contracts because of this," the trader said.
Vietnam's farmers also still held their beans as rallying London's robusta market pushed up local prices to record high in recent weeks, making exporters difficult to secure beans.
Vietnamese beans were offered at discounts of $175-$180 a tonne under
London's May contract, placing robusta grade 2,5 percent black and broken at $2,428-$2,433 a tonne, FOB basis this week, compared to $2,270-$2,280 a tonne last week.
But exporters offered Vietnamese beans for shipments after May at small discount of $80 a tonne under July contract as exporters still cautious whether the rallying prices will continue, said the Singapore's trader.
In Indonesia, the world's second-largest robusta producer, exporters remained cautious as offering beans for forward shipments on concern about supply as beans from the main harvests were still trickling.
Indonesian export-grade 4, 80 defect beans were offered at a discount of $50-$70 under London's July contract, compared to $80 discount in early March, making Indonesian beans more expensive than Vietnamese robusta.
"There are not many beans this year so it has been narrowing discounts because people worry that they may not get enough beans," said a trader in
Bandar Lampung, a key port for Indonesia's robusta exports in Sumatra island.
Harvests in Sumatra usually start in March or April, but farmers have been picking cherries since January as the flowering season began earlier in some areas after the previous crop ended last August.
A Buying-spree by local roasters have pushing up prices, as they were competing against exporters who sought cargoes to fill up existing contracts, traders said.
WEEK AHEAD
Discounts for Indonesian Sumatra beans are likely to remain strong next week with little signs of supply picking up from the main harvest.
"It's nearly April but coffee beans deliveries to Bandar Lampung average 2,500 tonnes a week which is quite low. Normally, it should be above 3,000 tonnes at this time of year," the trader said.
The Indonesian Coffee Exporters Association expects Indonesian coffee bean production to fall by 30 percent this year from an estimated 600,000 tonnes in 2010, as rains in key producing areas damage cherries. ----
