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Weak coffee demand in Vietnam amid erratic weather, prices steady

Demand for robusta coffee beans was slow this week in major producer Vietnam at a time when erratic weather slowed down bean processing in the country’s Central Highlands, traders said on Thursday.

Farmers in Vietnam’s main coffee-growing province Daklak were offering coffee beans at 37,300-37,600 dong ($1.64-$1.66) per kg, compared with last week’s range of 37,100-37,700 dong, traders said.

The 5-percent black and broken grade 2 robusta was quoted at a discount of $65-$75 per tonne to the ICE March futures contract .

That compared to a discount of $50-$65 a week ago, but independent analyst Nguyen Quang Binh said trading was thin as buyers hesitated.

“Demand from buyers was strangely weak,” Binh said. “They have only bought beans for contracts due for delivery.”

Another trader, based in Ho Chi Minh city, said exporters accepted higher prices to secure contracts, while coffee roasters were not looking to buy and farmers held back beans to wait for better offers.

Coffee roasters, the main buyers of robusta, were discouraged by weather changes which slowed down the drying process.

“Trading would pick up when beans harvest goes back on the rails and coffee roasters started buying,” the trader said.

Traders estimated 90,000-95,000 tonnes of Vietnamese coffee beans were shipped in November, after started low last month at the beginning of the 2017/2018 crop year. In Indonesia, the grade 4 defect 80 robusta was set with a $110-$120 a tonne premium to the January contract.

A trader in Lampung, the main coffee growing province in Indonesia, said prices rose in line with the London market and traders were becoming more speculative in setting prices amid depleted stocks.

“The price jump did not have any effect (on trade),” the trader said, adding that no transaction took place this week.

Reuters 8-12-2017

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