Indonesia Coffee Supply Tight Despite Higher Price

By Shahira Yusoff

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Supply disruption caused by a series of natural calamities in recent months and labor shortages that followed have driven Indonesian coffee prices significantly higher, but production hasn't kept pace with rising demand.

The situation has been made worse by farmers hoarding coffee in the hope that prices would rise further, market participants said.

"There is a lot of coffee but we're not seeing huge volumes reaching the market yet," said a Singapore-based trader.

Prices had risen so much that many exporters weren't able to fulfill earlier contracts as they didn't have the stocks, he said.

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