Asia Coffee-Vietnam prices inch higher on supply crunch, fresh virus curbs

HANOI/BANDAR LAMPUNG, Indonesia - Vietnam’s domestic coffee prices edged up this week due to tight supplies at the end of the season and the government’s social distancing order in parts of the coffee-growing region, after a first coronavirus case was detected in more than three months.

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

The Central Highlands province of Dak Lak has implemented social distancing norms from midnight Wednesday in an effort to curb the community transmission of the coronavirus. It was not clear how long the order would be in place.

Farmers in the Central Highlands, Vietnam’s largest coffee growing area, sold coffee COFVN-DAK at 33,000-33,200 dong ($1.41-$1.43) per kg, slightly up from 31,800-32,000 dong range a week earlier.

As Vietnam is heading towards the end of its crop season, traders said the reintroduction of the virus would not weigh on domestic prices as much as it did in March.

“Trading activities have already been dull since the last couple of weeks due to low stocks and now with the resurface of the virus, the market will be lots more tepid,” said a trader based in the coffee belt. “But I don’t think the prices would rise much.”

New coffee season will start from October but fresh beans will not come in bulk until November, traders said.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at a $130 premium per tonne to the September contract, down from $160 premium last week.

In the Indonesian province of Lampung, Sumatran robusta beans are offered with $240 premium to September contract, one trader said, down from last week’s $250 premium as new supplies are rising from the ongoing robusta harvest.

Another trader quoted unchanged premium of $250 for September through November contracts to compensate for weaker dollar, while demand was solid this week.

“The demand for exports is high,” the trader said. ($1 = 23,175 dong)