Indonesian coffee exporters offered a higher discount this week to lure buyers amid rising supplies as the main harvest was well under way, dealers said on Friday. Indonesian exporters offered $170-$210 a tonne under the September contract on London robusta futures on Friday, widening from $130-$140 a tonne last week.
The discount priced Indonesian export-grade robusta grade 4, maximum 80 defects, at $2,272-2,312 a tonne free on board Panjang port. "Shippers offer bigger discounts because supply is ample as more areas have harvested. The discount could go up to $250 when more beans come in," said a dealer in a foreign exporting firm in Bandar Lampung, the key port for exports of robusta coffee in Sumatra island.
Buyers were still reluctant as they are waiting for discounts to widen further, the trader said. Farmers and merchants delivered between 2,000-3,000 tonnes of robusta coffee beans a day - used for instant coffee - from plantations to Bandar Lampung this week, compared to 2,000 tonnes a day in previous weeks.
"We haven't bought coffee beans in a week because our warehouses are still full of beans," said another dealer in Bandar Lampung. The main harvest of robusta coffee in Sumatra island starts in March and peaks in May-July. The provinces of Lampung, South Sumatra, and Bengkulu in the southern part of Sumatra island account for three-quarters of total coffee output from Indonesia, the world's fourth-largest coffee producer.
Gains in London coffee futures offered support for local prices despite climbing supplies. London's September robusta coffee settled at $2,482 a tonne on Thursday, higher than $2,442 a tonne the previous week.
Exporters bought robusta beans from merchants at 19,000-20,500 rupiah a kg, up from 18,750-20,000 rupiah a kg last week. Robusta beans make up about 85 percent of Indonesia's coffee output, estimated at 450,000 tonnes this year, while the rest is higher-value, aromatic arabica beans.
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