Indonesian robusta premiums hit eight-month low

Aribica Gayo Coffee

Aribica Gayo Coffee. (Biecoffee.com)

Indonesian coffee premiums tumbled this week to an eight-month low of $30 a tonne after rallies in London futures, prompting attempts by sellers to unload stocks, dealers said on Friday. Liffe March robustas settled up $28 at $1,775 a tonne on Thursday after earlier matching the 3-1/2-month high of $1,803 hit this week on concerns over nearby supply. Premiums and futures usually move in opposite directions.

Premiums for Sumatran 4, 80 defect robustas dropped to $30 to $40 a tonne to the March contract from $130 to $140 a tonne last week. They hit a three-month peak of $200 in October. The drop in premiums to their lowest level since April prompted sellers in the world’s second-largest robusta producer after Vietnam to unload unsold stocks from the recently-ended harvest on fears the differentials could fall further.

“Differentials have crashed. We’ve got plenty of offers, with the amount ranging from 20, 40 to 100 tonnes,” said a dealer in Indonesia’s main growing island of Sumatra. More offers from Indonesia suggest that speculators and farmers are still in possession of beans after the end of the recent crop season. Farmers and speculators in Vietnam, on the other hand, are holding back beans in an effort to push up global prices, which sank to a three-year low in November on the prospect of a record crop in top coffee producer Brazil.[]

Reuters/brecorder.com

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