Bloomberg News

Indonesia Coffee Premium Falls 29% as Deliveries Climb

May 25, 2012

Buyers of coffee from Indonesia, the world’s third-biggest robusta grower, are paying a smaller premium for their beans as arrivals at ports increase, according to Volcafe, the coffee unit of ED&F Man Holdings Ltd.

Indonesian beans for June and July shipment were trading at a premium of $50 a metric ton to the price on the NYSE Liffe exchange in London, the Winterthur, Switzerland-based trader said in a report e-mailed today. That compares with a premium of $70 last week, data from the trader show.

Coffee delivered to ports climbed to about 8,000 tons this week, Volcafe estimated, from 6,000 to 6,500 tons last week. Rains in some growing regions “could interrupt the flow of coffee next week,” according to the report.

Differentials are “softening again” also because the the Indonesian currency weakened, Volcafe said, referring to a discount or a premium paid to obtain physical coffee in relation to the price on the futures market.

In Vietnam, the world’s biggest robusta producer, trading is slow as local prices climbed to 44,000 dong ($2.11) a kilogram (2.2 pounds), the highest price this year, according to the report. While exporters are looking to buy, there aren’t offers, Volcafe said.

Vietnamese coffee for June and July shipment was at a discount of $10 a ton, unchanged from last week, data from the trader show.

Robusta coffee for July delivery was up 0.9 percent at $2,242 a ton by 3:08 p.m. in London, after reaching $2,249 a ton, the highest price since Sept. 5.

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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