Asian Coffee: Indonesia premiums at one-month top, Vietnam beans at discount

Premiums for Indonesian coffee jumped to their strongest in a month this week because of the slow progress of the current harvest, while Vietnam beans changed hands at discounts to London futures, dealers said on Thursday. New crop grade 4, 80 defect beans from the main growing island of Sumatra stood at premiums of $100 a tonne to London's July contract, up from $80 last week for May shipment. Premiums for prompt delivery were much higher at above $200 a tonne against May.
"Coffee supply is still tight and I think the flow will pick up in a month's time. Right now premiums are at $250 for prompt shipment, and people who need coffee have to pay such high prices," said a dealer in Singapore. "The beans are a mixture of old and new crop. There isn't much availability. It's probably traded around $250 in the internal market, but there's not a great deal of business going on."
The harvest in Sumatra began at the end of January and is likely to peak in the next three months. Indonesia is the world's third-largest coffee producer and also the second-largest grower of the robusta variety, which is blended with arabica for a lower-cost brew or processed into instant coffee.
Heavy rains damaged the previous crop in 2011, causing a severe supply shortage that sent premiums to all-time highs of $550 last August. Dealers in top robusta producer Vietnam offered beans at discounts of $30 to $40 a tonne to London's July contract for the 2, 5 percent black and broken beans variety, hardly changed from last week.
March coffee exports by Vietnam are estimated to rise by a quarter from a year ago, while its shipments in the first six months of the current 2011/2012 crop year eased 4.6 percent to nearly 13 million bags, government data show. "The differential does move around, depending on London futures, but I think it's fair to quote discounts at around $40. There's a bit of trade going on," said the dealer in Singapore. Benchmark Liffe May robusta coffee futures closed down $1 at $2,058 per tonne on Wednesday, tracking declines in New York arabica futures. Analysts expected arabica coffee futures on ICE to keep moving lower after the biggest daily surge in five months earlier this week.