DJ Asia Coffee Mixed As Indonesian Arrivals Rise; Slow Vietnam Sales

SINGAPORE (Dow Jones)–Asian coffee prices were mixed in the week to Friday amid gains in international prices even as concerns over the upcoming Brazilian crop and an increase in bean arrivals in Indonesia continue to weigh on prices, said trade participants. 

Price signals are mixed because while Indonesia\’s harvest is strong, 85% of Vietnam\’s harvest has been sold and availability is limited, a Singapore-based trading executive said. 

Traders said European demand is also sluggish amid the ongoing economic crisis. Indonesia\’s coffee prices have declined the past two weeks to around IDR9,500 a kilogram from IDR9,700/kg, said a trader in Jakarta. 

He added the increase in arrivals from the highlands has pressured prices.  
The premium for Indonesian coffee also adjusted lower in line with higher prices on Liffe.  
The grade 4, 80 defects robusta is now fetching a premium of $30 a metric ton over Liffe July coffee futures.

Traders said as the local harvest progresses, the premium for Indonesian coffee may decline further and prices may even turn to a discount of up to $10/ton over Liffe.
The July contract over Liffe is currently around $1,344/ton.
 
Prices in Vietnam were steady at VND24,600/kg and export prices were marginally higher in line with the rise in prices on the Liffe and a slowdown in arrivals. 

Vietnam\’s coffee exports for prompt shipment are now quoted between at par with the Liffe July futures contract and a $10/ton premium. Offers are at a $20/discount to the Liffe September contract.

Even though local coffee availability is limited, ample supply from Indonesia and Brazil\’s bumper crop are bearish for prices in the medium term, said a trader at Ho Chi Minh City. 

In India, prices rose marginally in line with futures in London and New York. However, premiums were unchanged on week. The premium for robustas was around $200/ton over Liffe coffee futures and for arabicas at 40 points over ICE contracts in New York. 

Robusta cherry AB beans is quoting at $1,545/ton, free on board for June shipment, while Arabica plantation A is being offered at $3,870/ton, FOB. 

Demand for robustas is steady due to less-than-normal sales from Vietnam, a Bangalore-based trading executive said.  

\”There haven\’t been much sales of arabicas recently as the cloud of a bumper Brazilian crop is hanging over us,\” he added.  

Traders said demand for washed arabicas has also eased because roasters in the European Union are instead blending cheaper robustas to cut costs amid the recent economic crisis.  
 
-By Sameer Mohindru, Dow Jones Newswires