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Asia Coffee: Exports seen slowing in Vietnam, Indonesia

Asia Coffee: Exports seen slowing in Vietnam, IndonesiaHANOI: Coffee exports from Vietnam and Indonesia have been slowing between two harvests in the world’s largest robusta producers, traders said on Thursday.

The next harvest is expected to start on time in Vietnam’s Central Highlands coffee belt from October and will peak in November, while Indonesia’s harvest ends this month. The two nations account for a quarter of global coffee exports. ICE November robusta coffee futures settled up $ 12, or 0.8 percent, at $ 1,604 per tonne while arabica coffee steadied, feeling some pressure from a stronger dollar.

The contract was traded down 1.43 percent at $ 1,581 a tonne at 0955 GMT on Thursday.

Vietnamese robusta beans grade 2, 5 percent black and broken stood at premiums of $ 60-$ 80 a tonne to the November contract this week, widening from $ 65-$ 70 last Thursday.

Beans grade 1, similar to Sumatran coffee, were offered at premiums of $ 110-$ 130 a tonne, up from premiums of $ 110-$ 120 a tonne a week ago.

“Farmers are selling slowly,” said a trader at a foreign firm in Ho Chi Minh City.

“They’ve seen prices falling, so they have not used much fertiliser, and the bean size looks a bit small,” he added. Fertiliser is critical to boost the bean size in the August-September period before the harvest peaks from mid-November.

The Vietnam Coffee and Cocoa Association (Vicofa), the industry body, has forecast production in the 2015/2016 season to be 20 percent less than in the current crop year due to water shortages, a state-run newspaper reported.

But traders said Vicofa’s forecast, often of a production fall in order to boost prices, was not reliable as it does not have sufficient capacity to conduct a comprehensive crop survey.

In Indonesia the harvesting is ending this month, reducing the inflow of fresh beans while strong demand from domestic roasters left little for export, traders said.

Sumatran robusta grade 4, 80 defects edged up at $ 1,640-$ 1,660 a tonne, free-on-board Lampung, from $ 1,630-$ 1,650 a tonne in late August.

Copyright Reuters, 2015

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