Traders Ship Coffee To Europe Exchange As Shipping Woes Ease

Traders are planning to deliver thousands of tons of robusta coffee from Asia to the ICE futures exchange in Europe for the first time in more than three years - a move likely to take the heat out of benchmark coffee prices that are near 10-year peaks.

Photo Insert: Thousands of tons of robusta coffee will be shipped from Asia to the ICE futures exchange in Europe for the first time in more than three years.

The coffee was bought after local prices in the Asian region slumped and global shipping logjams eased, Maytaal Angel reported for Reuters. ICE, which runs futures and equities exchanges worldwide, functions in part as a market of last resort for excess coffee, so any sign the relentless drawdown in its stockpiles is ending could lessen investor worries over supplies, prompting them to sell.

Traders shipped at least 18,000 tons of robusta coffee - equal to more than a fifth of current ICE exchange stocks - from Vietnam and Indonesia in January, much of it destined for exchange-approved warehouses in Antwerp, Amsterdam, and London, five sources at top global trade houses told Reuters.

Vietnam is the world's top producer of robusta coffee but exchange stocks are currently dominated by supplies from No. 2 robusta producer Brazil. Indonesia is the third-largest robusta producer.

Trade houses including Ecom, Sucafina, and Louis Dreyfus are shipping the beans at relatively low freight rates because they are using carriers known as breakbulk to export the coffee, the trade sources said, something that has not been seen for 25 years.

Sucafina confirmed it was shipping robusta from Vietnam in breakbulk vessels. Louis Dreyfus declined to comment. Ecom was not immediately available to comment.

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