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Asia Coffee: Indonesia seen pressuring Vietnam

SINGAPORE: Indonesian exports are expected to gain momentum in the near future despite low futures prices, putting Vietnam under increasing pressure to sell remaining green coffee, traders said on Thursday.

"It (Indonesian coffee) will come in in a few weeks. They cannot hold back that long," said a trader.

Indonesian exporters have scrambled to cover short positions because farmers are holding beans in the hope of better prices later.

But traders said that with the harvest moving into full swing, the farmers were likely to release more beans soon. The rupiah was expected to be stable against the dollar.

The Indonesian crop is expected to yield 400,000 to 420,000 tonnes, more than 10 percent more than the previous season and likely to create an added pressure on farmers to release stock.

Indonesian robusta grade four, 80 defects was heard quoted at $180-$200 per tonne under London contracts, FOB Lampung, for shipment from May onwards.

With Indonesian exports expected to pick up, traders said the Vietnamese had cut their outright prices for robusta grade two, five percent black and broken, as low as $780 per tonne, FOB Saigon Port, for immediate shipment.

Just a few weeks ago Vietnamese traders had declined to sell beans below $800 based on a LIFFE futures benchmark near $950.

The latest offer as low as $780 was being made against a LIFFE price recovering towards $1,000.

"There is too much robusta," said another trader.

Vietnamese exports are surging.

The General Statistics Office in Hanoi said earlier that Vietnam would export 50,000 tonnes in March, bringing total coffee shipments in the first quarter to an estimated 200,000 tonnes -- up 94.2 percent from the same period last year.

Traders said Vietnam was reluctant to do business on differentials or sell forward. Many exporters have recently suffered large losses after selling at discounts of $300 into a market that was trending down.

They said some exporters were still delaying shipments for March and urging buyers to re-open negotiations on contracts.

No buyers seemed to have agreed to do so, but some international trade houses might be affected because of such moves by Vietnamese exporters, traders said. -Reuters