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US coffee traders are considering importing robusta beans from European warehouses, potentially exploiting cheaper shipping costs, as stocks there build even as farmers in top-grower Vietnam hoard supplies in hopes of higher prices.
Significant robusta shipments from Europe are rare and have not been widely seen in two years, but traders say the economics currently favour the approach as Vietnamese differentials are near historically high levels.
“It’s not shocking if you start seeing shipments coming,” one US importer said.
Farmer hoarding caused the premium that US roasters pay for physical delivery of Vietnamese beans to rise as high as 15 cents a lb earlier this month, the most in nearly two years.
At the same time, certified robusta stocks in ICE Futures Europe warehouses have continued to grow, rising to 184,350 tonnes as of June 8. Traders would be able to take delivery of these beans from the exchange at prices level with futures, though they would still have to pay loading-out fees of €35 ($39.11) a tonne.
Shipping from Europe, traders say, is one-third to one-half cheaper than from Vietnam. One trader said it can cost $75-85 a tonne to ship coffee from Europe, compared with $125-145 from Asia.
To be sure, none of the seven coffee traders interviewed for this article said they currently had plans to import robusta from Europe, and an easing of Vietnamese premiums in recent weeks has reduced the incentive, as futures prices rose more than 10 per cent.
But the fact that they are thinking about the rare move shows the need for a change in tactics to ensure supplies of robusta, used in instant coffee and lower quality blends.
Major US roasters have already responded to Vietnamese hoarding by substituting conilons, the Brazilian variety of robusta, into their blends.
Shipments of robusta from Europe to the United States jumped sharply in 2013, when rains delayed Indonesia’s harvest amid an earlier round of hoarding in Vietnam.
Vietnam shipped 117,000 tonnes of beans to the US in 2013 – a sharp decline from the prior year but still the most of any country, according to data from shipping intelligence firm PIERS. But imports from Belgium, where most European stocks are stored, more than doubled to 21,404 tonnes, overtaking Indonesia.
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