Asia Coffee-Vietnam trading slows, Indonesia muted

Trading in major Asian coffee producers remained dull on Thursday

FILE PHOTO: Women sort coffee beans at a coffee factory in Hanoi, Vietnam September 29, 2015. Photo: Reuters

Trading in major Asian coffee producers remained dull on Thursday, with Vietnam seeing low activity on weak demand while the Indonesian market is expected to remain muted in the lean pre-harvest season, traders said.

The 5-percent black and broken grade 2 robusta was quoted at a discount of $30-$45 per tonne to the ICE March futures contract, compared with a discount of $60-$65 per tonne a week earlier.

This price level is not attractive to importers while exporters could not lower the price further as farmers were unwilling to compromise, traders said. Domestic prices fell nearly 17 percent alone in the last quarter of 2017, Thomson Reuters data showed.

Vietnamese farmers in coffee-growing Daklak province quoted coffee beans at 37,000-37,100 dong ($1.63) per kg, slightly lower than last week's range of 37,000-37,300 dong, traders said.

Prices had scaled a 5-1/2-year peak of 47,650 dong in March last year when Vietnam's coffee crop was hurt by unusually long rainfalls during the harvest season.

Global coffee output is also seen rising to a fresh record in 2017/18 as a recovery in robusta production offsets a decline in the arabica variety, the International Coffee Organization (ICO) said on Tuesday.

Arabica coffee production is projected to reach 97.3 million bags, down 1.1 percent from the 2016/17 season, while the robusta coffee output in 2017/18 is seen at 61.5 million bags, up 3.7 percent on last season, ICO said in its monthly report.

Traders estimated that about 30 to 50 percent of the current harvest in Vietnam has already been sold.

In Indonesia, the grade 4 defect 80 robusta were traded at a $160 premium to London March contract this week, unchanged for the past three weeks due to the holiday season, said a trader in Bandar Lampung.

A few small transactions took place this week, the trader added, but activity is expected to remain subdued in the next few months ahead of the harvest.