Bloomberg News

Vietnam, Indonesia Coffee Premiums Seen Firm by Volcafe

June 29, 2012

Buyers of coffee from top robusta grower Vietnam and third-ranking Indonesia are paying higher premiums for beans because of limited availability, according to Volcafe, the coffee unit of ED&F Man Holdings Ltd.

Vietnamese beans for July and August shipment were at a premium of $60 a metric ton to the price on the NYSE Liffe exchange in London, data from the Winterthur, Switzerland-based trader show. That’s unchanged from last week and higher than the $40 a ton two weeks earlier, according to the data.

Indonesian coffee for shipment in the same period was at a premium of $70 a ton to the exchange price, unchanged from the previous two weeks, according to Volcafe. The premium was $10 a ton in the week ended June 8, data from the trader showed.

Robusta coffee is “still on the shopping list” for industry buyers, the trader said in a weekly report to clients e-mailed today. “The opportunity to buy raw coffee remains scarce and highly expensive,” in Vietnam, Volcafe added.

In Indonesia, the local industry is buying and building stockpiles to bridge the end of the 2012-13 crop there and the start of the Vietnamese season, it said. Bean arrivals at ports there were about 10,000 tons this week, Volcafe added.

The 2012-13 crop in Vietnam is unlikely to match that of 2011-12, Volcafe said in the report, citing its most recent crop survey and without providing a new estimate.

The 2012-13 season started in April in Indonesia and will begin in October in Vietnam. Vietnam’s production will be 24 million bags in 2011-12, the trader estimated last month. At the time, it said Vietnam would produce 22 million bags for 2012-13.

A bag of coffee weighs 60 kilograms (132 pounds).

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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