Indonesian robusta price differentials up in Europe's coffee market

Price differentials for Indonesian robusta shot up in Europe's cash coffee market this week as export supplies were well below international demand, traders said on Friday. "Coffee flows out of Indonesia are not enough to satisfy roaster requirements," one cash trader said.
"The country's crop looks smaller and local roasters are buying available supplies, differentials shot up but there was still European roaster buying interest despite the high prices." Indonesian EK-1 robusta was on Friday quoted at $100 over London's July robusta contract, up from $60 over last week.
Dealers said it was the highest Indonesian differential for about 18 months but trade was reported at the $100 level. Beans from Indonesia, the world's second-largest producer of robusta, had been quoted at $30 under London in March and in November 2010 had been $100 under London.
Indonesia's coffee exporters association said on May 11 the country's coffee output may fall by 15-20 percent because constant rain was damaging crops. "Problems in robusta were compounded by a continued lack of selling by Vietnam, where exports are low and producers are playing poker, hoping for further rises in London prices," another trader said.
Exports from Vietnam, the world's top robusta producer, have been slowing, government data showed this week. "There were a lot of inquiries about alternative robusta supplies such as from India, Uganda or Brazilian Conillon this week, but there is not a lot to be had and it looks like we could be facing a prolonged robusta supply problem," the first trader said.
In arabica, weaker futures sparked some roaster bargain-hunting of a range of origins largely for spot/nearby delivery, traders said. New York arabica futures fell to their lowest level in six weeks on Thursday as part of general weakness in soft commodities.
Business in Brazilian beans was slowed by relatively firm differentials and belief among some roasters that futures were set to fall future, dealers said. Colombian differentials rose three cents on the week to 22 cents over nearby New York because of growing concern about rain damage to the country's crop and the view local harvest estimates are too optimistic.
Some Central American origins such as Honduras are increasingly sold out of old crop, traders said. European roaster buying of Guatemalan beans for June/July shipment was also noted. "There was also fair demand for Costa Rican beans but the country has already made large sales to the United States and not all inquiries could be met," a trader said.