Indonesian exporters are offering higher discounts for robusta coffee beans to lure buyers amid increasing supplies in the main harvest season and sagging demand from local roasters. Local exporters offered Indonesian robusta grade 4, maximum 80 defects at around $50 under the September London robusta coffee futures contract, said a dealer.
"Local exporters are starting to lower prices. They have to otherwise it will be difficult to sell the beans," said the dealer in Bandar Lampung, the provincial capital of Lampung, one of the country's key coffee-growing areas.
Prices of robusta, used to make soluble coffee, collected from farmers and merchants fell to between 15,500-16,700 rupiah ($1.72-$1.85) a kg this week, from 16,500-17,200 rupiah a week ago.
But another dealer in Lampung said local exporters offered discount at $180-$200 under September contract to lift sagging demand as local roasters have reduced buying. "Some sellers are offering lower prices for exports because supplies are increasing while local roasters already have plenty of beans. So demand is bit sluggish," said the second dealer in Lampung.
Coffee beans supplies from the main harvest have improved from last week as more areas began harvesting and as farmers released stocks to get money to pay for tuition fees for children ahead of the new school term in mid July. Arrivals of coffee beans from plantations to Panjang port in the key growing area of Lampung have doubled from last week to around 2,000 tonnes a day.