Indonesian coffee roasters may start importing beans again because of difficulties in getting supplies even during the harvest, while differentials for Vietnamese coffee improved after a drop in London futures, dealers said on Thursday.
Vietnam's grade 1, screen 16 beans - the special variety sought by Indonesian roasters - was quoted at premiums of between $40 and $70 a tonne to London's July contract, with no reports of deals yet. Indonesia robusta was at much higher premiums. "The coffee is not sort of flowing out of plantations. Any coffee that is available will be immediately used," said a dealer in Singapore. "Local roasters are buying everything because they need to roast the beans."
Late last year, roasters from Java turned to Vietnamese beans after tight supply ahead of the new harvest in 2012 in the main growing island of Sumatra sent premiums to a record at $550 a tonne. This year's harvest is underway in Sumatra, but high premiums of up to $250 against the front-month May contract suggested the crop could have been affected by heavy rains this year, while demand from local roasters was strong.
New crop grade 4, 80 defect beans from Sumatra stood at premiums of between $80 and $100 a tonne to London's July contract, steady from last week, although there were also quotations at $60. Beans for prompt delivery also were offered at $120 to $150 to London's May contract. The harvest in Sumatra began at the end of January and is likely to peak in the next three months.
"I would say that we have zero stocks because we've sold out our coffee to meet contracts with foreign buyers," said a dealer in Bandar Lampung, the provincial capital of Lampung on Sumatra. "We don't even have old beans left in our warehouses." Indonesia is the world's second-largest robusta producer after Vietnam, where a sizeable amount of coffee from the recently-concluded crop is still in the hands of farmers.
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