Indonesia coffee exporters delay shipments, may default

SINGAPORE, Oct 22 (Reuters) - Indonesian coffee exporters have delayed shipments of at least 30,000 tonnes of beans to various buyers and could default on delivery after a sharp drop in London futures prices, dealers said on Wednesday.

Many exporters bought beans from farmers when local prices hovered around 18,000 rupiah a kg ($1.80) two months ago. The price has since dropped nearly 30 percent to 13,000 rupiah, meaning exporters would suffer losses if they shipped out the beans now.

'At least 40,000 tonnes have been contracted, and out of that amount around 30,000 tonnes may not be shipped out at all because of the risk of losing money. They want the (London) price to go back to $2,000,' said a regional dealer.

The beans from Indonesia's main producing province of Lampung on Sumatra have been allocated for delivery to buyers in Europe and the United States. Indonesia is the world's second-largest robusta producer after Vietnam.

London's January robusta contract shed $5 to end at $1,786 a tonne on Tuesday -- not far from a 17-month low of $1,642 hit two weeks ago. The contract rallied to $2,815 in March, its highest for the second month since July 1995.

'We can't confirm it because we haven't received any reports. The association hasn't got explanation from trading houses and exporters,' Suherman Harsono, chairman of the Lampung chapter of the Indonesia Coffee Exporters' Association, told Reuters.

Rumours that local sellers in Lampung are delaying shipments have been circulating in the market in the last few days as coffee prices tumble amid fears of a global recession.

The delays in shipments came after local coffee exporters said they planned to plan to set prices for coffee before shipment, rather than at delivery, to protect themselves from steeply falling values for the commodity..

In Indonesia, coffee exporters normally agree on export commitments but delay their decision on prices until after beans have been delivered.

'We've been hearing reports about defaults from Indonesia. I can't confirm it but I can't deny it either. So far I am okay because we have our office in Lampung that gets beans directly from farmers,' said a dealer at a trading house in Singapore.

Dealers said stock levels were steady between 80,000 and 90,000 tonnes in Lampung, with the harvest having peaked in August, and exporters could further delay shipments if there was no improvement in London prices.

'There's always a danger of default. Exporters are still expecting the market to recover to minimise the losses,' said the regional dealer.

Robusta beans make up around 85 percent of Indonesia's coffee output, estimated at around 450,000 tonnes this year, while the rest is higher-value, aromatic arabica beans.

The International Coffee Organization (ICO (nasdaq: ICOC - news - people )) said the global financial crisis could cut coffee supplies and people could drink more at home.

($1=9,980 rupiah)

(Editing by Kim Coghill)

Region: Indonesia, Vietnam reeling from downturn

The global economic uncertainty is having a detrimental impact on the coffee industry in Southeast Asia - particularly in Indonesia and Vietnam.

The worst affected growers are those planting Robusta coffee, who tend to be the poorest of the region's farmers. According to reports, while prices have been slumped, stockpiles have been building up - meaning that even if there is a rise in demand, prices are likely to remain low. The director of the Central Queensland University's Centre for Plant and Water Science, David Midmore, told Radio Australia's Connect Asia program, that this could be an opportunity for farmers."The price of coffee's probably gone down about 20 per cent over the last six weeks," he said."But on the other hand, it may open up some opportunities because over the last year or so, the price of other agricultural commodities such as cereals has more than doubled."

Associate head of the Purdue University Agricultural Economics Department, Gerald Shively, has studied the impact of falling coffee prices on Vietnamese smallholders.He explains though, that it is not always easy for farmers to switch."One of the fundamental problems with perennial crops is that they often go through boom and bust cycles because farmers who are responding to higher prices plant the crops," he said."But in a case of coffee, it takes two to three years for the crop to begin producing and then when the coffee prices decline, farmers are somewhat locked in to the fact that they have coffee plants in production."

Professor Shively says these farmers had been attracted by high prices in the mid-90s, which transformed rural life in parts of Vietnam.However, because of seasonal differences, in Indonesia, the poorest farmers are being shielded from some of the impact. "In Indonesia, we have so far Arabica and Robusta and the harvest seasons are inverted, so fortunately the Robusta farmers, who are the ones producing the cheaper coffee, their main crop was when the price were at the highest," said coffee exporter Olivier Tichit from IndoCafe."Fortunately for them they could sell most of their products, maybe 85, 90 per cent of their coffee at very good prices."You can find the full story at the Connect Asia website: http://www.radioaustralia.net.au/connectasia

Region: Tanzanian Coffee prices firm at Moshi aution

Oct 3
Tanzanian coffee prices firmed slightly at last week's auction as buyers sought to cover their positions ahead of a Muslim holiday, traders said on Wednesday. The Tanzania Coffee Board (TCB) said 46,150 60-kg bags were on offer on Thursday last week, with 44,984 sold. In the previous week's sale, 32,623 60-kg bags were offered for sale, with 16,926 sold.

Benchmark grade AA sold at $175-$129.40 per 50-kg bag, compared with $170.00-$130.00 per bag at the last auction. Grade A was bought at $170-$133 per 50-kg bag, compared with the previous week's $152.40-$129 per bag. "The quantities on offer were quite handsome. Generally, prices were very firm. It could be mainly (due to) shippers who are short of coffee," said Kennedy Keya, a trader with Dorman Tanzania.

"The quality is good. Prices may have been firm because there's no auction in Tanzania (this week) so many people are trying to cover their short positions." Tanzania largely produces arabica coffee but also grows robusta, thriving mostly in the northern, southern and western parts of the country in areas around Mount Kilimanjaro and Lake Victoria. The auction, held in Moshi took place on last week but TCB released the results on Wednesday.

Region: Indian Coffee exports up 2.54 % in FY08

India’s coffee exports for the crop year (October 2007 to September 2008) has increased by 2.54 per cent at 230,910 tonnes as against 2,25,187 tonnes exported during the previous year, according to the Coffee Board statistics.

In dollar terms, the exports were up 32.09 per cent higher at $586.27 million as against $443.83 million last year. In rupee terms coffee exports have gone up by 27.45 per cent at Rs 2,427.86 crore as against Rs 1,904.95 crore realised last year.

In terms of unit value realization, exports were up 24.29 per cent at Rs 105,143 a tonne as against Rs 84,594 a tonne fetched last year. According to the International Coffee Organization, global exports in the first 11 months of coffee year 2007-08 have decreased 4.5 per cent to 86.6 million bags compared to 90.7 million bags in the same period last coffee year.

Indian coffee exports for first-nine months were also up 6.26 per cent at 184,976 tonnes as against last year’s exports of 174,077 tonnes. “After selling most of the produce, about 10-15 per cent of the coffee is left at the farms. Buoyed by high prices last few weeks, coffee growers are demanding more than Rs 200 a bag,” said B L Harish, proprietor of Blan Coffee, Kushalnagar, a farm gate trader.

Other sources however have slightly different numbers:

IRIS NEWS DIGEST: Coffee export rise 5.75% in Jan-Sep`08

As per the Coffee Board`s latest data, the coffee export from India has shown robust performance during the period of Jan-Sep, 2008 due to a significant increase in overseas sales of value-added coffee, reports Business Line.

As per the statistics, India`s coffee exports rose by 5.75% at 0.184 million tons in the first nine months of 2008 as compared to 0.174 million tons a year ago period.

There has been a quantum jump in value-added coffee exports and it will add-up in the coming months as well. The export of value-added products that largely constitutes instant coffee rose by 101% to 18,739 tons during January-September period, the Board data said.

Meanwhile, export of robusta variety rose marginally by 2.12% to Rs 92,543 tons in the review period from 90,618 tons last year. While overseas sale of arabica variety improved significantly by 19.26% at 42,461 tons, the data showed.

However, instant coffee sales plummeted drastically by 19.96% to 31,233 tons, it added.

Getting the Coffee Straight from the Beans

Good Information here!

by Johnathan Bakers

There are do many different types of beans and the plants will fall in three different categories. The Arabica, first known on the Arabian Peninsula and the Robusta that contains about two times the amount of caffeine in every cup. This is going to be something to wake you up in the morning for sure.

These beans are going to be different that of wine because of the thing called coffee berry that is decided not because of the fruit but due to the bean that is found inside it. A bean is aged perfectly, roasted and then ground and brewed. Coffee is going to be as it has never been before with this type of bean, you could use it with your cappuccino maker.

The beans are actually going to be found in two different ways. There will be green and the red with the red having the most in smelling power of oil and the much lower acid amounts. This is used to make the higher quality coffees. One of the biggest deals in the life of bean is when it leaves the shelf from the time it was plucked.

Beans are usually picked from the hands of people and this means that there are only a few baskets done a day. They have to separate the red and the green and it is something that is a big job requirement. This is due to the huge impact on the outcome of the coffee.

Having good cappuccino is going to depend on the way that the bean is picked. The fruits can be soaked, scoured, and rubbed by machines. After this, the beans are going to be washed and removed from the part that is still there. This is going to be known as the fermentation period and will bring about beans that are dried in the sun over a large concrete or rock. This will go on until at least twelve percent is determined to be water.

The beans are then going to be displayed by their size and color and done more so by a machine. Some of the beans are going to be thrown away and others will be polished to take the skin off. For some of them, the beans are going to be aged for three to eight or nine years and the others are going to be ready for roasting in one year. This will make your cappuccino makers happy!

With the 400-degrees Fahrenheit that these beans are roasted at, they will grow to at least twice their dried out size. They may crack and even change color as the green goes to brown because the oils from the inside are being released. The oil will give the different types of coffees their true and delicious taste that we love so much.

There are so many different types of techniques that have been found for the roasting part. The beans from the Java and Kenya are usually going to be barely roasted and produce a delicious flavor for coffees. Once the roasting is done the beans, will then produce a carbon dioxide for a few days and this will make the beans because rid of their gasses? Airing or packing them in the semi-permeable bags that is made for shipping only does this.

The result is going to happen a few weeks from now. They are going to be ground where there will be differences in styles and results. In some of the cases, the burr grinders are going to crush up the beans to a size that is normal like a granule. With the others, the choppers are going to be used to chop up the beans so small with a tinier result. There is also Turkish coffee that will be made with the pounding of the beans to almost powder. This will be done with mortar and pestle.

The deciding taste is the brewing. This will be where there will be a variety of styles and ways for each brewing company. All of the good differences will be in one of four degrees and they are boiling, pressure, gravity and steeping. With boiling, the water is hot and ran through the actual grounds as they are going to be filtered out. With the pressure type, this will be espresso for most, they are going to be lightly boiled and the water will force the grounds through with the intense hot pressure. The gravity or what is also known, as drip brew will have hot water dripping onto the coffee grounds that are inside filters. This is typical for most people because they are going to want to use the coffee makers that are easily bought today. Also steeping is going to be much like the method of having tea with tea bags. This is even though the bags are a lot larger than others are.

This is going to be a long journey from the places that coffee comes from but the coffee beans are going to make it to your kitchen from the jungle. Many love a great drink. With the new ways of research and the actual health benefits from the coffee consumption, increasingly love it all the time. It is a great way to have a little picked me up anytime of the day or night. There are many flavors to love and so many will want to try increasingly.