Vietnam coffee market subdued ahead of main harvest in upcoming weeks

HANOI/BANDAR LAMPUNG, Indonesia - Coffee trading in Vietnam remained lacklustre ahead of the main harvest expected from mid-November, with traders awaiting new beans coming in bulk in upcoming weeks, traders said on Thursday.

Workers sort arabica green coffee beans at a coffee mill in Pangalengan, West Java, Indonesia May 8, 2018. Photo: Reuters

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee at 33,200 dong ($1.43) per kg, compared with last week's 32,400-34,000 dong range.

“Market is dull due to lower international prices, scarce supplies and adverse weather,” said a trader based in the coffee belt.

Vietnam’s national centre for weather forecasting said the coffee belt regions would mostly be rainy for at least another week, which could hamper farmers’ beans picking and drying process.

“If it continues to rain, both beans quality and productivity will be hurt,” said another trader, who is also based in the region, adding that new beans would likely to come from the second half of November.

January robusta coffee settled down $14, or 1%, at $1,313 per tonne on Wednesday.

Traders in Vietnam offered 5% black and broken grade 2 robusta at premiums of $170-$180 per tonne to the January contract, narrowing from the $170-$200 range last week.

Meanwhile, traders in Lampung province on Indonesia’s Sumatra island said premiums for robusta beans were unchanged from last week even when harvest has ended.

One trader offered $170 premium to the January contract while other offered $270 premium to the November contract as exporters compete with local buyers for remaining supply.

“Local prices are not coming down yet, while those who still have coffee stocks are still holding on to their stocks,” one of the traders said.

Indonesia exported 16,345.6 tonnes of robusta coffee beans from Sumatra island’s Lampung province in October, local government data showed.