Asia Coffee-Vietnam domestic prices edge lower on movement curbs, high shipping cost

Vietnam's domestic coffee prices edged down on Thursday from a week earlier, as pandemic-related movement curbs and high shipping costs are hindering transactions.

A man checks roasted coffee beans at a factory in Hanoi, Vietnam November 22, 2016. Photo: Reuters

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee COFVN-DAK at 34,600-35,500 dong ($1.50-$1.54) per kg, down from 34,800-36,200 dong a week earlier.

"Imminent coronavirus movement restrictions are expected to significantly slow down domestic transactions, while high shipping costs continues to limit the outflows of coffee," said a trader based in the Central Highlands province of Dak Lak.

Vietnam will impose tight movement restrictions in its commercial hub Ho Chi Minh city for 15 days from Friday to tackle a coronavirus outbreak. The city is home to the country's key port for export activities.

An independent market analyst said the movement curbs won't likely have any meaningful impact on Vietnam's coffee export prices.

"With or without the domestic movement restrictions, coffee exporters have already been facing high shipping cost due to container scarcity," the analyst said. "Even if the shipping cost reached the sky, it would still be hard to find empty containers."

Traders in Vietnam offered 5% black and broken-grade 2 robusta COFVN-G25-SAI at a discount of $60-$100 per tonne to the September contract, compared with last week's $50 discount.

In Indonesia, Sumtran robusta beans were offered with $30 to $50 premium for August contract, unchanged from last week, one trader said.

Meanwhile, for September contract, another trader said beans were offered with zero differential, down from $10 premium a week earlier.

"There are a lot of beans, but not that many buyers this week," the second trader said.