Vietnams domestic coffee prices rebound; Indonesian premium expands

Domestic coffee prices in Vietnam bounced back on Thursday, tracking a recovery in London, after hitting their lowest level in three years earlier this week, while Indonesian premium expanded from last week.

A woman sorts coffee beans at a coffee factory in Hanoi, Vietnam on September 29, 2015. Photo: Reuters

Farmers in Vietnam’s Central Highlands sold coffee at 31,600-32,500 ($1.36-$1.40) per kg on Thursday, down from a range of 32,000-33,100 dong last week. Prices fell to as low as 30,700 earlier this week.

“Prices in Vietnam are moving in tandem with London prices, which also hit a multi-year low on Tuesday,” a trader based in Ho Chi Minh City said.

May robusta coffee settled up $44, or 3.1 percent, at $1,457 per tonne on Wednesday.

Traders said low prices have discouraged farmers from selling their beans and put a break on exports.

Vietnam’s coffee exports in March fell 24 percent from a year earlier to 160,000 tonnes, government data released on Friday showed. Shipments in the first quarter fell 15.3 percent to 477,000 tonnes.

Traders in Vietnam offered 5 percent black and broken grade 2 robusta at a $75 per tonne discount to the July contract, compared with a $30-$50 discount last week.

Meanwhile, in Indonesia, premium expanded this week to compensate for the recent drop in the benchmark London prices.

Premium for the grade 4 defect 80 robusta rose to $100-$110 to the May contract on Thursday from $70-$80 a week ago, a trader in Sumatra’s Lampung province said.

“Transaction remain light in volume as supplies from an ongoing mini harvest in some areas in southern Sumatra remain limited,” the trader said.

He said trade won’t pick up significantly until next month. The main robusta harvest in Indonesia typically starts from mid-year.

Indonesia’s exports of Sumatra robusta in March totalled 6,563 tonnes, up 53 percent from a year earlier but down 19 percent from February.