SINGAPORE: Indonesian coffee roasters were eager to buy local beans this week after a spike in global prices cut differentials, while trading slowed in rival Vietnam ahead of the arrival of fresh beans from the new season, dealers said on Friday.
Sumatran grade 4, 80 defect beans were offered at $10 to $20 below London's January contract for October-November delivery, having been quoted at par earlier this week and at premiums of up to $20 two weeks ago. The current harvest is expected to end this month.
"Buyers want to buy the beans at minus $50 but I don't hear any deals yet. Local buyers are in the market," said a dealer in Bandar Lampung, the provincial capital of Lampung on the main growing island of Sumatra.
"About 90 percent of the crop has been harvested. I would say warehouses are still full and exporters need to fulfil commitments until the end of the year. But we don't see much coffee going out because of the same problems with vessels."
Many exporters who have booked smaller ships in recent months were unprepared for the increase in coffee arrivals from plantations in Sumatra as the crop recovered from bad weather.
Coffee exports in September from Sumatra rose 77 percent from a year earlier to 18,488.26 tonnes, and exporters are still scrambling for bigger vessels to ship out beans from the main export port of Panjang in Lampung.
Heavy rain damaged the 2011 crop, causing a severe supply shortage that sent premiums to all-time highs of $550 to futures.
Indonesia's coffee production in the 2012/13 season is forecast at 9.7 million bags, a rebound of 1.4 million because of favourable weather conditions, according to the US Department of Agriculture.
Indonesia is the world's second-largest robusta producer after Vietnam, which together account for about 23 percent of global output, according to the International Coffee Organization.
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