Asian Coffee Prices Mostly Lower As Supply Concerns Ease

Asian Coffee Prices Mostly Lower As Supply Concerns Ease

Coffee prices in Asia were mostly lower in the week to
Friday as concerns about supply from major coffee-producing countries such as
Brazil and Colombia eased, but prices remain elevated due to strong global
demand.
Globally, arabica prices were higher, but in Asia they were more sticky.
Arabica coffee for July delivery on the IntercontinentalExchange settled at
$2.6680 a pound Thursday, up 2.1% from a week earlier but well off the
multi-year high of $3.0890/pound hit on May 2.
Some traders expect arabica futures to trade flat in the next few sessions
with resistance likely at $2.70/lb.
However, frost in Brazil could still hamper harvesting activities and might
push prices upward, cautioned a Singapore-based trader.
July robusta on the London International Financial Futures Exchange settled
lower, falling 0.4% over the week to close Thursday at $2,461 a metric ton amid
fears that roaster buying could slow in the coming months, as most roasters
have covered their needs for the period.
The volatility in coffee prices over the past few months has made purchasing
decisions very difficult, said a roaster in Singapore.
The roaster said he doesn't expect prices to come off quickly, however, as
global stocks are very tight and demand still remains strong in countries such
as Brazil, Vietnam and India, he said.
Prices are already quite high in major Asian coffee producing countries, with
premiums in top robusta supplier Vietnam quoted at around $30/ton to London's
September contract, and those in Indonesia, another key producer, quoted at
more than $100/ton to London's September contract, a second trader in Singapore
said.
Domestic prices in Vietnam have eased in the past week, with farm gate prices
hovering around VND50,200 a kilogram, down from VND51,000/kg a week earlier, as
some who have been holding stocks have parted with the beans, said a trading
executive at a leading coffee export house in Ho Chi Minh City.
However, prices could climb to VND60,000/kg in the coming months as there's
very little coffee left, he said.
Exports in June could fall by as much as 30% from a month earlier to around
80,000 metric tons, he said.
In India, Asia's third-largest producer, high quality arabica plantation bean
prices were steady around $6,300/ton, a trading executive in Bangalore said.
Traders aren't willing to sell at lower prices, he said.
However, robusta prices have eased slightly due to the fall in London
futures. Robusta cherry AB beans are quoted at $2,650/ton, down from $2,700/ton
a week earlier, the trader said.
Total Indian coffee shipments from Jan. 1-June 8 were estimated at 193,743
tons, up from 135,217 tons in the corresponding period last year, data from the
state-run Coffee Board showed Friday.
Exports may slow, however, as domestic consumption remains strong and the new
crop harvest won't likely start before December, he said.