HANOI: Several parts of Vietnam’s Central Highlands, the country’s coffee belt, have recorded rainfall, easing drought fears, while traders in Indonesia estimated a fall in this year’s main harvest output.
Farmers in Vietnam sold beans at 53,200-54,200 dong ($2.27-$2.31) per kilogramme, up from 50,800-52,800 dong range a week ago. “Some farmers even quoted 56,000-57,300 dong per kg, the highest level I’ve ever experienced,” said a trader based in the coffee belt. “Domestic price will likely hit 60,000 dong.”
Even as it rained in several parts of the coffee belt this week, traders said the weather condition would be monitored closely due to the affect of El Nino.
A trader in Vietnam offered 5% black and broken-grade 2 robusta at discounts of $150-$160 per tonne to the July contract, higher than last week’s $120-$130 range.
Another trader quoted a $180-$190 discount range to the same contract. Vietnam’s coffee exports in April stood at 163,607 tonnes (2.7 million 60-kg bags), down 22.2% from March, customs data showed. January-April coffee exports were also down 5.5% against the same period last year.
“April’s exports were below our expectation of 3.3 million bags, hinting a beans shortage,” the second trader said. “Discounts remain high as buyers are still seeking beans in Vietnam, while London prices rose following Vietnam’s weak exports data,” he added. Indonesian Sumatra robusta beans for May-June contract were offered at $100 premium, unchanged from last week.
Main harvest is often from May until July. This year, output was estimated to be 20%-30% lower than the previous one, another trader said.
“Multiple factors, including heavy rainfall, old crops and lack of subsidised fertiliser supply, contributed to the drop,” the trader added.
Another trader said price for July contract rose to $60 premium this week, compared with last week’s $40 premium. “Prices rising despite expectations of harvest in June makes no sense,” the second trader said, adding few beans were coming to Lampung.
Source: Brecorder
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