Asia Coffee-Trading slows in Vietnam on thin demand, Indonesia muted

HANOI - Coffee trade was sluggish across Asia’s top robusta producers, with Vietnam seeing low activity on thin demand while Indonesia remained muted due to low stockpiles, traders said on Thursday.

A woman places coffee beans into a machine to sort the beans by size at a coffee factory in Hanoi, Vietnam September 29, 2015. Photo: Reuters

Farmers in the Central Highlands, Vietnam's coffee-growing capital, sold coffee at 32,200-32,600 dong ($1.40-$1.44) per kg, in line with London prices, and compared with last week's 33,200 dong.

March robusta coffee settled $9 lower at $1,356 per tonne on Wednesday.

“Demand is very thin now, mostly because of continued shipping shortage, while supplies are building up from the current harvest,” said a trader based in the Central Highlands.

“Farmers are complaining prices are too low to release en mass. They are just selling enough to cover daily needs.”

Another trader based in the region said farmers would release more beans in the coming weeks when they were under pressure to cash in before the Lunar New Year holiday.

Traders in Vietnam offered 5% black and broken grade 2 robusta at premiums of $90-$100 to the March contract, down from $135-$145 premiums last week.

Indonesia’s Sumatra robusta beans this week were offered at $230 to $275 premiums to the March contract and $270 to $280 premiums to the April contract, traders in Lampung province said.

They were offered at a $230 premium to the March contract and $270 premium to the April contract before the year-end holidays.

Traders charged higher premiums to compensate for a stronger rupiah this week, one of the traders said.

The rupiah has strengthened by about 1% against the dollar this week.

Meanwhile, stocks remained tight as exporters awaited the next harvest season.

Lampung province on Sumatra island exported 15,300 tonnes of robusta coffee beans in December, down 11% from a year earlier, official data showed.