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Asia Coffee: Vietnam Slow to Sell, Indonesia Premiums Dip
November 11, 2011

Robusta coffee beans are roasted at the Losari Coffee Plantation in Magelang, Central Java, Indonesia, on Saturday, Sept. 18, 2010. Indonesia is the largest Asian coffee grower after Vietnam. (Bloomberg Photo/ Dimas Ardian) Robusta coffee beans are roasted at the Losari Coffee Plantation in Magelang, Central Java, Indonesia, on Saturday, Sept. 18, 2010. Indonesia is the largest Asian coffee grower after Vietnam. (Bloomberg Photo/ Dimas Ardian)
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Singapore. A lack of selling from Vietnam, the world's largest robusta producer, kept differentials from widening, but coffee premiums in Indonesia dropped because of the early arrivals of beans and hopes of good weather, dealers said on Friday.

Premiums for grade 4, 80 defect beans from Indonesia's main growing island of Sumatra fell to $400 a ton to January contract from $525 a ton two weeks ago and a lifetime high of $550 struck in August. 

Vietnam's grade 2, 5 percent black and broken held at discounts of $50 to $60 to January contract despite the arrival of beans from the current harvest that is expected to yield a bumper crop. 

"Everyone is waiting for the discounts to widen, but it doesn't seem to be happening," said a dealer in Singapore, who trades Vietnamese and Indonesian beans. 

"The crop is in the season, but they are talking about raining or not enough sun to dry the beans." 

Other dealers said the Vietnamese held on to their beans because of falling domestic prices and recent weakness in London futures, where the January contract was within sight of its weakest in more than a year. 

A Reuters poll showed Vietnam's output this season could rise to a record, with a median estimate of 21 million bags, from 18.5 million bags in 2010/11, and well above the 19.3 million bags seen in 2006/07, its previous record.


Reuters