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Singapore. Premiums for robusta skyrocketed in Asia as supply scarcity worsened, with Indonesian beans changing hands at $200 above London futures and Vietnamese coffee at $150 premiums, raising fears of more delays and even default, dealers said on Wednesday.

Stocks were thinning in top robusta producer Vietnam ahead of the next crop later this year, while exporters in second-largest producer Indonesia are struggling to get beans after persistent rains caused a shift in harvesting time, which damaged coffee cherries. 

"We've seen traded volume at $200 plus for the Indonesian grade. Whoever doesn't have the coffee, they have to pay up. Roasters are still looking at the outright price," said a dealer in Singapore, who trades Indonesian and Vietnamese beans.

"Vietnamese prices are equally high. The grade is already traded at $150 premium," he added.

Indonesia's export-grade 4, 80 defect beans were last seen at $200 premiums in November 2009, dealers said. The beans were offered last week at premiums of $150 a ton to London's September contract , which went up $20 to finish at $2,296 per ton on Tuesday. 

"Yes, that's right. 80 defect has been traded at $200 premiums FOB," said a dealer in Bandar Lampung, the provincial capital of Lampung in Sumatra. Although high premiums could prompt roasters to turn to coffee beans kept at warehouses in London, dealers still noted buying interest for prompt delivery for both Indonesian and Vietnamese beans. 

Vietnam, grade 2, 5 percent black and broken beans were offered at premiums of between $50 and $70 to London's September contract last week.

"Beans have been traded at $150 premiums in the local market in Vietnam, maybe two or three containers were sold yesterday," said a dealer in Hong Kong, who trades Vietnamese beans.

"Everybody wants to sell at this price level. Stocks in the hands of farmers are not so big. We think it's somewhere around 180,000 metric tons. They are waiting for higher prices." 

Vietnamese coffee exporters have delayed loading part of contracts totalling around 100,000 tons since May because of a shortage of stocks, an industry official said on Monday.

Export volume could fall in coming months, with June shipments already been expected to drop to 65,000-80,000 tons from an estimated 110,000 tons last month. 

Vietnam, which accounts for 14 percent of global coffee output, is forecast to have a bumper harvest of 22 million to 24 million bags in the crop year to September 2012, from 20 million to 22 million bags in the current crop ending September.  

But sentiment in the coffee market was still underpinned by the prospect of falling output elsewhere, an increase in global consumption, and shortages in good-quality beans following a bad harvest in second-largest robusta producer Indonesia. 

Indonesian coffee exporters have cancelled the shipment of at least 3,000 tonnes of robusta beans for April and May delivery because of difficulties in getting supply after erratic harvests. 

"Trading houses which are selling forward, but then short of beans will get bitten by these prices if they enter the market.

You've got to watch out. There might be default," said the dealer in Singapore.  Global coffee output in 2011/12 is expected to fall slightly to around 130 million 60-kg bags, from 133 million the previous year, according to the International Coffee Organization.

 
Reuters