Bloomberg News

Indonesian Coffee Premium Narrows as Harvesting Gathers Pace

June 08, 2012

Buyers of coffee from Indonesia, the third-biggest robusta grower, are paying a smaller premium for their beans this week as harvesting gathers pace, according to Volcafe, a unit of ED&F Man Holdings Ltd.

Indonesian beans for June and July shipment were at a premium of $10 a metric ton to prices on the NYSE Liffe exchange in London, the Winterthur, Switzerland-based trader said in a report to clients e-mailed today. That compares with a $20 premium last week, Volcafe data show.

About 70 percent to 80 percent of the coffee grown in lowlands has already been harvested, according to the report. Pickings in highlands currently amount to about 20 percent, the trader said. Indonesia will produce 9.1 million bags of coffee in 2012-13, up from 6.2 million bags a year earlier, Volcafe estimated in a quarterly report last month. A bag of coffee weighs 60 kilograms (132 pounds).

Bean deliveries to port in Indonesia were “quite stable” at about 7,500 to 8,000 tons this week, Volcafe said. The local industry was “quite active,” buying as much as 5,000 tons of robusta from Lampung.

Buyers of coffee from Vietnam, the world’s largest robusta grower, were paying a premium of $10 a ton to exchange prices for June and July shipment, Volcafe data showed. Last week the beans sold at NYSE Liffe prices. There was “hardly any coffee on offer,” the trader said in the report.

In India, Asia’s third-biggest producer, there was almost no robusta left, Volcafe said.

Robusta for July delivery fell 1.8 percent to $2,084 a ton by 2:53 p.m. in London.

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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