Coffee arrivals from Indonesia’s southern Sumatra, the main growing region of the world’s third-largest robusta producer, slowed this month because of heavy rain, widening the premium to the price in London.
Deliveries to warehouses in Lampung province have dropped to between 250 metric tons to 300 tons per day from about 500 tons last year, said Moelyono Soesilo, marketing and purchasing manager at exporter PT Taman Delta Indonesia. Buyers are paying premiums of between $30 and $40 a ton over the May-delivery contract on NYSE Liffe, Soesilo said by phone. That compares with $10 to $20 at the end of March, he said.
Reduced supplies from Indonesia may extend this year’s 7.8 percent advance in prices of the bitter-tasting robusta variety used by Nestle SA in instant drinks. Farmers have picked about 12,000 tons of beans on the lowlands in Sumatra and stockpiles were seen at about 2,000 tons at the end of last month, according to Amsterdam-based trader Nedcoffee BV. The harvest in the country usually runs from April to July, with a smaller crop through September.
“Supplies are really tight,” said Mochtar Luthfie, head of research and development at the Lampung chapter of the Association of Indonesian Coffee Exporters and Industries. “The main harvesting may be delayed to June or July from May because of the rains.”
Parts of Lampung and Northern Sumatra may receive as much as 100 millimeters per day, with lightning and strong winds in the week to April 22, the Meteorology, Climatology and Geophysics Agency said yesterday. The provinces of Lampung, Bengkulu and South Sumatra on the southern tip of Sumatra island account for about 75 percent of Indonesia’s coffee output.
Robusta for July delivery, the most-active contract, rose 0.1 percent to close at $2,074 a ton in London yesterday. The contract for delivery in May gained 0.2 percent to end at $2,034.