Indonesia coffee: robusta arrivals trickle as prices fall

Indonesian robusta farmers are holding back stocks in hope of better returns after local prices dived more than 10 percent week-on-week, tracking Brazil-linked weather concerns in the London market, traders say.
They said on Friday the robusta harvest rolled on in the Sumatra provinces of Lampung, South Sumatra, and Bengkulu, which account for 75 percent of coffee output in Indonesia, one of the world's leading robusta producers. "I believe many beans are still being kept by farmers since prices fell more than 500 rupiah ($0.05) a kg in the past two days," said one trader in Bandar Lampung.
"Farmers now follow price movement closely to get better prices. So, when global prices fell because the frost rumour faded, they weren't too keen to sell," she said, adding that daily arrivals had eased to well below 1,000 tonnes this week from 1,500 a week.
Weather forecaster Meteorlogix recently predicted the weather would remain very mild in top producer Brazil, with no threat of frost damaging coffee trees in the next seven days.
Robusta harvests in Indonesia are expected to reach their peak this month before tailing off in September. Local prices for grade four, 80 defect robusta beans fell to between 5,100 to 5,200 rupiah ($0.54 to $0.55) a kilogram on Friday.
Export prices also slipped $20 to between $620 to $630 a tonne, FOB basis, against on Thursday's offer, or down $90 per tonne compared with the previous week.
Differentials widened to $220 per tonne under London July contracts. "We're forced to give more discount because buyers are not rushing to get coffee," one Bandar Lampung exporter said.
Under LIFFE coffee robusta futures, the July contract settled down $17 to $781 a tonne on Thursday, while September ended down $14 at $772 a tonne. Exporters said they would prefer waiting for another week to get a clearer picture on fresh weather developments in Brazil.
Weather forecasters had said the only time chilly weather may threaten Brazil's coffee belt would be after June 30, which would likely send prices soaring.