Indonesian coffee prices up

Indonesian robusta coffee rose on Thursday as local exporters bet on an imminent rise in prices, despite higher supplies as farmers released stocks to pay tuition fees for a new school term. Prices of robusta collected from merchants rose to between 16,500 rupiah and 17,200 rupiah ($1.83-$1.91) a kilogram this week, from 16,000 to 17,000 rupiah.
"Some local exporters are speculating that prices may go up again, so they dare to buy at higher prices from merchants," said a dealer in Bandar Lampung, the provincial capital of Lampung, one of the country's coffee growing belts.
On the London robusta coffee futures market, the September contract settled higher at $1,909 per tonne, and the market looked poised to retest nine-year highs of $1,945 a tonne seen on June 22, against a backdrop of tight supplies and strong global demand.
Last week, the contract ended at $1,869 a tonne. While buying at higher prices, local exporters offered Indonesian robusta grade 4, maximum 80 defects for prompt shipment, at a discount of $30-$40 a tonne against the London robusta futures price. But buyers sought a higher discount of around $100 a tonne.
"Local exporters offered lower discounts because they are still buying beans at high prices from farmers and merchants. But we are seeking a higher discount," the Lampung dealer said. Trading in Lampung was busy, with beans flowing in as more areas had started harvesting and farmers released stocks to get money to pay tor tuition fees ahead of a new school term in July.
Arrivals of coffee beans from plantations to Panjang port, the key port for robusta coffee exports, varied between 1,000-2,000 tonnes a day, rising from around 1,000 tonnes a day a week ago. "Trading is dominated by local exporters who sell beans to foreign exporters that need export-grade coffee beans," said another trader in Lampung.
"Supplies will peak this month because farmers need cash to send their children to school. It may slow down in August as farmers hold stocks to be released during the Muslim Ramadan festival," she said, referring to the Muslim fasting month, which will be in September.