Coffee export markets were quiet this week with premiums in Vietnam edging down on a rebound in London prices while discounts widened in Indonesia amid a steady supply of bean, traders said on Thursday.
The London ICE July contract extended its rebound for a third straight session, rising 1.95 percent to close at $2,034 per tonne on Wednesday.
The 5-percent black and broken grade 2 robusta in Vietnam, the world’s largest grower of robusta beans, was quoted at a premium of $20-$30 per tonne to London’s ICE July contract, narrowing from $40-$50 per tonne a week ago.
Coffee was traded locally at 44,800-45,000 dong ($1.97-$1.98) per kg, up from 43,000 dong last Thursday. However, trade was thin as farmers held back their stock seeking higher prices.
“Farmers are still holding onto beans as they want to wait for prices to bounce back to their previous level,” said Nguyen Quang Binh, an independent analyst.
Vietnam exported an estimated 604,000 tonnes (10.1 million 60 kg bags) of coffee in the first four months of 2017, down 8.8 percent from a year ago, the government said on Friday.
Coffee exports in April were estimated at 150,000 tonnes, well above market expectations of 100,000-130,000 tonnes.
Discounts widened this week in Indonesia, traders said. Robusta grade 4 defect 80 traded at a $40-$80 discount to the July contract, compared with a $40-$50 discount last Thursday.
“This is because prices at the London terminal have dropped significantly,” a trader in Lampung said, adding that the big discount left traders on the sidelines.
Meanwhile, the market is seeing a steady supply of beans as the harvest continues, traders said.
Reuters
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