Coffee Exports From Indonesia’s Sumatra Surge to Four-Year High By Yoga Rusmana - Aug 1, 2013 3:08 PM GMT+0700

Source: Bloomberg

Coffee shipments from Indonesia, the third-largest producer of the robusta variety used by Nestle SA (NESN) in instant drinks, jumped in July to a four-year high after prices surged and farmers sold beans before a festival.

Exports from southern Sumatra’s provinces of Lampung, Bengkulu and South Sumatra climbed 378 percent to 55,709 metric tons from 11,648 tons in June, the Lampung trade and industry office said in a statement today. That’s the highest since 57,282 tons sold in June 2009 and compares with 21,685 tons shipped in July 2012. The provinces account for about 75 percent of the country’s supplies that include beans and instant coffee.

Robusta futures rallied in London from a 32-month low in June as farmers in Vietnam, the top grower, held beans to boost prices, while wetter-than-usual weather in Indonesia slowed deliveries and delayed harvesting by a month to May. Prices advanced 6.5 percent in July, the most since May 2012.

“Farmers released fresh beans from the harvest after prices gained,” said Mochtar Luthfie, head of research and development at Lampung chapter of the Association of Indonesian Coffee Exporters and Industry. Growers also needed money for the Muslim festival of Eid al-Fitr next week, he said.

Robusta futures climbed 9.9 percent to $1,873 a ton on the NYSE Liffe from $1,704 on June 14, the lowest level since October 2010.

Farmers boosted sales before rains hurt the bean quality and prices start to decline, Moelyono Soesilo, purchasing and marketing manager at PT Taman Delta Indonesia, said in a mobile-phone text message.

Shipments from Indonesia will probably plunge 19 percent to 6 million bags (360,000 tons) this year because of the higher-than-usual rainfall, according to a Bloomberg survey published July 29. That’s the biggest drop since at least 2007, according to data from the Central Statistics Agency.

Output may slide to 9.58 million bags from 11.04 million, the median of eight shipper estimates showed. Exporters are offering beans for August delivery at $100 a ton above prices on NYSE Liffe, down from $150 to $180 in early July, the median of estimates from four exporters showed.

To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net