Asia Coffee -Vietnamese farmers start early harvest, Indonesia muted at harvest-end
Reuters | Sep 21, 2017, 17:05 IST
By Mai Nguyen
HANOI, Sept 21 (Reuters) – Coffee farmers in Vietnam have started early harvesting but trade is still muted in both Indonesia and Vietnam due to weak demand and low supply, traders said on Thursday.
Vietnamese coffee growers have started an early harvest in the world’s largest robusta producer and exporter, adding a few fresh beans to the stock in September, the last month of the country’s usual crop year, one trader said.
Farmers in Daklak province, Vietnam’s main coffee growing area, are selling coffee at 44,000-44,500 dong ($1.94-$1.96) per kg , up from 43,400-44,000 dong a weak earlier, tracking a gain in London prices, traders said.
London ICE January futures on Wednesday had risen as much as 5.79 percent since Sept. 6, when they hit their lowest in more than a month on worries that output in top coffee grower Brazil might be less than expected, the traders said.
Favourable weather conditions and low supply of the 2016/2017 crop year have prompted farmers to harvest some beans earlier than usual, but only sparsely, a trader said.
Vietnamese exporters offered the 5 percent black and broken grade 2 robusta at a discount of $55 to par to the January contract, widening from last week’s $40 discount to par, but barely any contracts were secured, traders said.
Global coffee buyers seem to have sufficient stockpile, leading to weak demand for coffee and a subdued export market in Vietnam, traders said. Only a few trades are made locally, they added.
“There are a few purchases between importers who hoarded and stored the beans in their Vietnam stores earlier this year and some local exporters who need beans to fulfil their committed contracts,” said independent analyst Nguyen Quang Binh.
Vietnam is expected to enter its main harvest season next month, when traders hope to see new contracts secured.
In rival Indonesia, grade 4 defect 80 robusta beans were traded at a $10 premium to the November contract on Wednesday, traders in the country’s main growing area of Lampung said, little changed from last week.
There were very few transactions this week as stocks ran out and as buyers wait for the next harvest, a trader said. Another trader said offshore buyers had moved on to Vietnam. ($1 = 22,731 dong) (Reporting by Mai Nguyen; Additional reporting by Mas Alina Arifin in Bandar Lampung; Editing by Mark Potter)