Jakarta, Oct 13 - Indonesian exporters plan to set prices for coffee before shipment, rather than at delivery, to protect themselves from steeply falling values for the commodity, a senior industry figure said on Monday.
In Indonesia, coffee exporters normally agree on export commitments but delay their decision on prices until after beans have been delivered.
Domestic bean prices track London robusta futures, and after a steep price fall in London futures recently, exporters who had bought beans when prices were higher could suffer losses, Hassan Widjaja, chairman of the Indonesia Coffee Exporters Association, told Reuters in an interview.
"Exporters and coffee growers can suffer huge losses, maybe more than $50 million due to price falls," Widjaja said.
He said exporters had bought beans at 19,000-20,000 rupiah per kg, or higher to meet export commitments made in the past few months, but the prices have since dropped to below 16,000 rupiah per kg and can drop further.
In London, the November robusta contract <LKDF9> dropped $35 to close at $1,751 per tonne on Friday. On Wednesday, the contract ended at $1,741 in the lowest finish for the spot contract since early December 2007.
The contract has lost more than 30 percent in value since spiking to $2,815 a tonne on March 6, the highest level for the second month since July 1995, when funds poured money into coffee amid gains in other commodities.
Widjaja said the association is also asking the government to issue a regulation that protects coffee exporters by allowing them to cancel contracts if prices at the time of delivery are down substantially from the time of agreeing on a contract.
Indonesia is the world's second biggest producer of robusta coffee after Vietnam. The country's coffee exports may grow about 8 percent to 325,000 tonnes this year, the association has said.