Nedcoffee Says Indonesian Coffee Deliveries Slowed by Weather
Coffee deliveries from farms in Indonesia, the world’s third-biggest producer of the robusta variety, slowed this season as a lack of sunshine delayed drying beans, according to Amsterdam-based trader Nedcoffee BV.
Bean deliveries to Bandar Lampung, where the country’s main coffee export port is located, are about 34 percent lower since the season started last month than the same period a year earlier, the trader said in a monthly report e-mailed today. Rain this week in some of the country’s growing areas may cause “minor disruptions” to the harvest, MDA Weather Services, in Gaithersburg, Maryland, said in a report e-mailed yesterday.
“The downside of current weather results in a delay of the drying process of the berries and an increased probability of moldy coffee beans if being exposed to a continuing high moisture environment,” said Nedcoffee, which owns a factory in Indonesia with storage capacity of 300,000 bags.
Farmers in southern Sumatra, the main growing area, have harvested about 10 percent of their 2013-14 robusta crop, the trader estimated. About 7 percent of all the crop has been delivered or sold by farmers and middlemen, it said.
Local roasters are paying more for their beans due to slow deliveries, Nedcoffee said. As a result, the premium buyers need to pay to obtain beans from Indonesia is “very high.”
Indonesian coffee for shipment in June and July was trading at a premium of $100 a metric ton to the price on the NSYE Liffe exchange in London at the end of last week, Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd. said in a weekly report e-mailed on May 10.
In Vietnam, the world’s largest robusta grower, farmers are holding back beans waiting for higher prices, according to Nedcoffee, which has offices in the country.
“Differentials, as a result, are ever firmer with fierce competition between local and international exporters,” Nedcoffee said, referring to a discount or a premium paid to obtain physical coffee in relation to the futures price.
Vietnamese beans for shipment in June and July were trading at a premium of $110 tons to the exchange price at the end of last week, up from $90 a ton the previous seven days, according to Winterthur, Switzerland-based Volcafe.
Vietnam may only be able to export an average 100,000 tons of coffee a month from May to October, Nedcoffee said. Shipments in the first 10 days of May were 43,000 tons and total exports for the month may total 130,000 tons, it said.
Rainfall in Vietnam has “wiped out all drought concerns and made farmers a lot more optimistic about next crop,” Nedcoffee said. “Many farmers interviewed by Nedcoffee Vietnam now expect an unchanged to slightly bigger crop in 2013-14.”
Robusta coffee futures for July delivery gained 0.2 percent to $2,054 a ton in London by 5:29 p.m. local time.
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.