HANOI, May 25 (Reuters) – Coffee export prices eased in Vietnam tracking a drop in the London market, but trade was thin amid limited supply, while Indonesian prices remained steady, traders said on Thursday.
Exporters quoted the 5 percent black and broken grade 2 robusta in Vietnam, the world’s top robusta maker, at $30-$40 premium a tonne to London’s ICE July contract , compared with $20-$40 premiums last week.
London prices have dropped a combined 4.6 percent during the past week to end at $1905 on Wednesday.
“There were bids and asks, but no actual trade as London prices dropped while local prices are yet to keep pace with the decline,” said independent analyst Nguyen Quang Binh.
Local prices quoted by Vietnamese farmers on Thursday edged down to around 42,000 dong ($1.85) per kg, from 44,000 dong-44,500 dong a week ago, which traders said, make export quotes higher than import offers.
“At 42,000 dong input cost, traders will still suffer from a loss if selling to foreign importers. Therefore, they were reluctant to conclude transaction,” Binh added.
Vietnam is forecast to harvest 28.6 million bags (1.72 million tons) of coffee from its next 2017/2018 crop, a rise of 10 percent from the current season, due to favourable weather conditions and higher domestic prices, a U.S. Department of Agriculture attache said.
In Indonesia, Vietnam’s major coffee competitor, traders said prices have improved this week. The robusta grade 4 defect 80 was quoted at $20-$30 discount to July contract, slightly up from $20 discount last week.
“Prices are a little bit better and stable because of a drop in London terminal prices to around $1,900 (per tonne),” a trader in Bandar Lampung said, adding that inventories at trading houses remained steady as supplies continued to stream in.
Indonesia’s market was closed on Thursday for a public holiday. ($1=22,688 dong)
(Reporting by My Pham in Hanoi; Additional reporting by Mas Alina Arifin in Bandar Lampung; Editing by Sherry Jacob-Phillips)
From Kitco News 25-5-2017