Supplies were building up from a harvest in Vietnam but domestic prices remained flat this week, as the key coffee growing region may have to face rains triggered by an upcoming storm, which could possibly hamper the bean drying process.
Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee at 40,400-41,500 dong($1.76-$1.81) per kg, unchanged from last week.
"Supplies have started to increase as farmers are harvesting their new beans," said a trader based in the coffee belt.
"The weather is getting better and drier but we are concerned about the upcoming storm. If it hits the Central Highlands and triggers rains, bean drying process will be affected greatly and bean quality will be hurt as a result."
The Vietnam Coffee and Cocoa Association (Vicofa) said earlier this week that coffee output from the current 2021/22 crop year may decrease as old coffee trees were not rejuvenated while some farmers switched to other fruit trees to earn more.
London ICE November futures settled up $6, or 0.26%, at $2,303 per tonne on Wednesday.
Traders in Vietnam offered 5% black and broken grade 2 robusta at a $400 discount per tonne the March contract, compared with last week's $430-$400 discount range.
In Indonesia's Lampung province, Sumatra robusta beans were offered at a $250 discount to the March contract, unchanged from last week, one trader said.
"Supply is depleting, which should have raised prices, but because the benchmark price rose, the discount remain unchanged," the trader said.
Another trader offered $200-$220 discounts to the February and March contracts, narrowing from last week's discounts of $220-$250 for those contracts.
"Container availability is still an issue and freight cost is too expensive. Its hard to find container space, especially to Singapore," the second trader said.
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