Indonesian coffee exports to fall

Robusta coffee exports from Indonesia's key coffee-growing island of Sumatra are likely to fall between 40 and 50 percent in 2006 as heavy rains have cut output, an industry official said on Wednesday.
"Sumatra's coffee exports fell by 30 percent in the first half. Exports are likely to fall 40 to 50 percent. We exported 334,845 tonnes last year," Nuril Hakim, chairman of the Indonesian Coffee Exporters Association (AEKI) for Lampung branch, told Reuters in an interview.
"Production will be lower this year because heavy rains fell when coffee trees produced flowers. Also carryover stocks in Lampung have dried out," said Nuril.
In the first half of 2006, coffee bean exports from Sumatra fell 30 percent to 100,358 tonnes, from 143,213 tonnes in the same period last year.
The beans, collected from the southern Sumatra coffee-growing areas of Lampung, Bengkulu and Palembang, were sold via Panjang port of Lampung province.
Coffee output from coffee-growing areas in southern Sumatra accounts for 70-75 percent of Indonesia's total coffee output, which is estimated at 315,000 tonnes in 2006.
Robusta constitutes 85 percent of coffee output from the world's fourth-largest coffee producer, while the rest is aromatic and high-value arabica. The projected lower output, however, is expected to support robusta coffee price at an average of $1,300 a tonne in 2006, Nuril said. "We hope prices will stay at around $1,300 this year because lower production will cut supply in the market, but demand is expected to steady," he said.
The benchmark September contract at the London robusta coffee futures touched a 6-1/2-year high at $1,340 a tonne on July 7. The September contract settled up $16, or 1.3 percent, at $1,234 a tonne on Tuesday.
In Lampung, prices of grade four robusta softened to between 10,600 and 10,700 rupiah ($1.15 and $1.16) a kg, from 10,700 and 10,800 rupiah a kg in end June, tracking lower robusta coffee futures.
"Trading is quiet in Lampung because supply is already dwindling as main crop harvest is nearly over. Buyers are not too keen to buy because they want to wait until prices fall further," said a trader in Lampung. Daily coffee bean arrival to Lampung port averaged 300 tonnes this week, down from 500 tonnes a day in June as main crop harvest is at tail's end.