Indonesian robusta coffee beans are being offered at a discount this week as more supplies come in, but local prices have risen on the back of gains in coffee futures. Exporters have started offering Indonesia coffee beans for prompt shipment at a discount of around $50 under London's September contract as supplies increase.
But local prices of robusta rose to between 16,400 rupiah and 17,600 rupiah ($1.82-$1.96) a kilogram this week from between 16,750 rupiah and 17,250 rupiah following gains in London robusta coffee futures. The benchmark September contract was down $4 at $1,914 per tonne on Thursday, but it was higher than $1,890 a tonne two weeks ago.
"Prices are up because London also has been moving up in the past week," said a trader in Bandar Lampung, the provincial capital of Lampung and a key port for robusta coffee beans exports. "Farmers are also being aggressive. They raise the price when they know the futures market is gaining. If we don't follow their price, local roasters would take the beans," the Lampung trader said.
Arrivals of coffee beans from surrounding plantations to Bandar Lampung have risen to 800-900 tonnes a day from 600 tonnes two weeks ago as around 40 percent of coffee-growing areas in southern Sumatra have started harvesting coffee cherries.
But traders said coffee beans harvested this week still have high water content at 36 percent compared with the standard 18-24 percent after rains in recent days have hampered drying of beans. "It's good if we can get beans with water content of 22 percent but that's very rare. Beans delivery to Lampung is also a bit slow, because farmers need time to dry the beans," said another trader in Lampung.
Traders have said this year's harvest season may last until December, as the main harvest start was delayed to May from the normal March due to dry weather.
The main crop harvest in Sumatra normally runs from March to October. Lampung, South Sumatra and Bengkulu account for three-quarters of Indonesia's coffee bean output. Coffee bean exports from Sumatra fell 64 percent to 28,566.93 tonnes in January to May from 78,352.58 tonnes in the same period last year.
Indonesia is the world's second-largest producer of robusta after Vietnam with robusta coffee accounting for 85 percent of the country's coffee output, which is seen at 300,000 tonnes this year. The rest is the more expensive aromatic arabica coffee.