Asian Coffee Prices Mostly Down;Mkt In Wait-And-See Mode

(Comtex Finance Via Thomson Dialog NewsEdge)SINGAPORE, Mar 21, 2006 (Dow Jones Commodities News via Comtex)

Asian coffee prices mostly fell in the week to Tuesday, pressured by another week of losses in international coffee futures.

On Monday, the May robusta contract on the London International Financial Futures and Options Exchange finished $8 lower at $1,111 a metric ton, or down $6 from a week earlier.

In Vietnam, trading activities were mainly dominated by sporadic domestic sales, said a Ho Chi Minh City-based trader.

“Farmers were keen to sell, perhaps a little concerned over the downtrend in the London market,” he said.

“But local exporters were not in a hurry to buy, with foreign buyers mostly on the sidelines, waiting for prices to drop some more,” he added.

Offers for robusta grade 2, 5% black and broken, were quoted around $1,060-$1,070/ton, FOB, Ho Chi Minh City, compared with $1,080-$1,090/ton, last week.

Another trader said farmers have been selling quite aggressively in the last few weeks to finance irrigation and fertilization for the new crop.

“But the weather is good, so sales have slowed down and farmers are holding on to their remaining stocks for higher prices,” he said.

He added that there had been some unseasonal rains in Lam Dong province and heavy rains late last year have helped replenish reservoirs and ponds, after years of prolonged drought reduced water reserves.

Lam Dong, Daklak, Gia Lai, Kontum and Dak Nong provinces in the central highlands coffee belt produce 80% of Vietnam’s coffee.

In Indonesia, trading activities came to a crawl as farmers refused to discount their stocks further, said one Lampung-based trader.

“The market is quite slow. Supply is there, but no one is interested to buy at current levels,” he said.

Arrivals will start to increase as harvesting activities intensify. So with supply pressure on prices looming, most buyers prefer to wait, said the Indonesian trader.

Offers for robusta EK1 grade 4 80 defects were quoted around $1,070-$1,080/ton, FOB, Lampung, compared with $1,100/ton a week earlier.

Offers for Mandheling grade 3 arabica coffee were quoted little changed around $2,850-$2,950/ton, FOB, Medan.

In India, the volatility in international coffee futures continued to damp trading interest, said a Bangalore-based trader.

“There’s not much trading interest at this point. Most sellers are holding back and buyers are only purchasing their shorts, until there’s a clearer direction in the market,” the Indian trader said.

Indian robusta cherry AB, was offered around $1,270-$1,280/ton, FOB, Cochin, compared with last week’s $1,300/ton, while arabica plantation A was offered at $2,180/ton, compared with $2,340/ton last week.

Credits : -By Shahira Yusoff, Dow Jones Newswires; 65-6415-4086; shahira.yusoff@dowjones.com

-Edited by Ryan Woo/TMC

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