Bloomberg News

Volcafe Sees Indonesian Coffee Harvest Peaking in June or July

May 18, 2012

Harvesting of the 2012-13 coffee crop in Indonesia, the world’s third-biggest robusta grower, is likely to peak in June or July, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd.

Growers there may harvest 10 million to 11 million bags of coffee this season, up from 7 million to 8 million bags a year earlier, the Indonesian Coffee and Cocoa Research Institute estimated on March 7. Production will rise because the weather was favorable during flowering, the institute said. A bag of coffee usually weighs 60 kilograms (132 pounds).

Coffee delivered to ports for export from Indonesia “picked up this week,” the Winterthur, Switzerland-based trader said in a report e-mailed to clients today. Port arrivals totaled 6,000 metric tons to 6,500 tons, according to the report.

Buyers of Indonesian coffee for June and July shipments are paying a premium of $70 a ton to the price on the NYSE Liffe exchange in London, Volcafe data showed. That compares with a premium of $90 a ton last week.

In Vietnam, the biggest robusta producer, traders are “edging up their crop estimates” and exports are 2 million bags ahead last year’s level, according to the report. The 2011-12 season in Vietnam started in October.

“Domestic sales slowed down as farmers stocks become thinner,” Volcafe said, adding that there is a “good appetite” to buy from exporters and traders for nearby shipments. Roasters are looking to buy coffee for later dates.

Vietnamese coffee for June and July shipment was trading at a discount of 10 cents a pound to the exchange price, unchanged from last week, data from the trader showed. Beans in the local market climbed to 42,000 dong ($2.02) a kilogram (2.2 pounds) yesterday, the highest since Oct. 18, according to data from the Dak Lak Trade & Tourism Center on Bloomberg.

In India, Asia’s third-largest coffee grower, premiums are rising on scarce supplies, Volcafe said.

“We are expecting some fierce internal battles for the remaining coffee as domestic roasters will have to secure coffee until new crop starts,” the trader said.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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