* Sumatran beans on par with London for March/April
* Vietnam robustas fetch smaller discounts at $10/T
* Sumatran beans for May/June at discounts
By Lewa Pardomuan
SINGAPORE, Feb 28 Indonesian robustas fetched
smaller premiums this week as more beans were expected to arrive
from plantations, while worries about dry weather pushed up the
price of Vietnamese coffee, dealers said on Thursday.
But No.2 robusta producer Indonesia could also see a pick up
in demand from foreign roasters in the coming weeks, with the
beans likely to trade at discounts to London futures as the main
harvest gains pace.
Sumatran grade 4, 80 defect coffee for March-April shipment
was on par with London's May contract, versus premiums
of $20 to $50 last week. Robustas in top producer Vietnam were
at discounts to futures.
"People may switch from Vietnam to Indonesia when you see
more beans in June," said a dealer in Singapore. "But I think
international roasters will have to compete with local players
like Kapal Api or Mayora."
Local roasters and processed food producers such as PT
Mayora Indah are active buyers of Sumatran beans, with
domestic consumption forecast to grow 7.6 percent to 2.54
million bags in the 2012/2013 crop year.
Harvesting in Indonesia's main growing island of Sumatra
normally starts in March or April, but good weather has brought
that forward this year. Heavy rain damaged the crop in the
2011/12 season, causing a severe supply shortage that sent
premiums to all time highs at $550.
Weekly arrivals were steady at between 900 and 1,200 tonnes
In Vietnam, grade 2, 5 percent black and broken beans stood
at discounts of $10 to the May contract, smaller than $20 last
week and $50 earlier this month.
Prices in the domestic markets rose this week to their
highest in four months on a slow return from the long Tet Lunar
New Year break and as farmers held back from the market in
anticipation of higher prices later in the year.
"I think the price in Vietnam will get firmer and firmer.
Farmers had sold whatever they needed to sell before Tet, but
now they will only release stocks slowly, and whenever the price
is good," said the dealer in Singapore.
"People are buying Vietnamese beans at minus $10, but it's
Vietnam's 2012/2013 coffee crop is estimated to fall about a
quarter from a record previous harvest to 18.75 million 60-kg
bags (1.1 million tonnes), and the next season could be hit by
drought, according to the chairman of the Vietnam Coffee and
WEEK AHEAD, RISING SHIPPING COSTS
Vietnamese robustas could trade at smaller discounts next
week if roasters rush to buy the beans on concerns over the
possible drought. In Indonesia, some exporters are worried about
a possible increase in freight rates for cargoes to Europe.
"Some shipping lines are going to impose a general rate
rise. The increase is pretty high from $250 per 20-foot unit to
$400 to $600," said a dealer in Sumatra.
(Editing by Joseph Radford)