Indonesian Coffee Deliveries Seen Slowing as Harvest Nears End
Coffee deliveries from farms in Indonesia, the world’s third-biggest producer of the robusta variety, slowed as the crop there comes to an end, according to Volcafe Ltd., the coffee unit of ED&F Man Holdings Ltd.
Bean deliveries to Lampung slowed to 6,000 metric tons last week, the Winterthur, Switzerland-based trader said in a report e-mailed Oct. 11. That compares with about 7,000 tons in the week ended Sept. 27, when arrivals had shrunk by 5,000 tons from the previous 7-day period, data from the trader showed.
Deliveries are “declining weekly, clearly the end of the crop is there,” Volcafe said. About 60,000 tons of beans are estimated to be in the hands of farmers and middleman, it said.
Indonesia gathered a slightly smaller crop in 2013-14 than a year earlier, at close to 10 million bags, Deepak Kaul, a Singapore-based vice president of the coffee division at Olam International Ltd. (OLAM), said in an Oct. 4 interview. The nation started harvesting its crop about April. A bag of coffee weighs 60 kilograms (132 pounds).
Beans from Indonesia for shipment in November and December were last week at a premium of $130 a ton above the futures price on NYSE Liffe in London, unchanged from the previous 7-day period, Volcafe data showed. Robusta coffee futures gained 1.4 percent in the period as stockpiles shrink.
In Vietnam, the world’s largest robusta grower, harvesting of the 2013-14 crop is starting and differentials are set to “weaken further in the next weeks when the crop starts to press,” Volcafe said. While beans for nearby shipment are at “high” differentials, offers for December onward are lower. Differentials refer to a discount obtained or a premium paid to buy beans in the physical market in relation to futures prices.
“Vietnam has early flow due to those November 2012 flowerings, but drying is stymied by storms,” Volcafe said.
Vietnamese coffee for shipment in November and December is at a premium of $130 a ton to the futures price, down from $160 a ton a week earlier, according to the report.
Robusta coffee for delivery in November gained 0.3 percent to $1,738 a ton by 12:24 p.m. in London.
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