Coffee harvesting in Vietnam has gained momentum due to favourable weather and higher prices this season, while trading slowed in Indonesia on thin stocks, traders said on Thursday. Exporters in Vietnam, the world's top robusta producing nation, focused more on loading than seeking new deals, while domestic prices fell slower than global prices, they said.
ICE January robusta futures settled down 2.5 percent at $2,046 per tonne on Wednesday, while robusta prices in Vietnam lost around 2 percent to 42.5-42.7 million dong ($1,875-$1,884) a tonne. But the Vietnamese prices are up nearly 2 percent from the start of the current coffee season on October 1. In the year-ago period, prices had declined 3.5 percent, according to Reuters data.
"Higher prices this year have encouraged farmers to pick up cherries faster," said a trader with a foreign firm in Ho Chi Minh City after a crop survey in the Central Highlands coffee belt. He estimated 25-30 percent of the crop had been picked, compared with around 15 percent last year. Half of the crop in the top growing province of Daklak has been picked, Trinh Duc Minh, head of the Buon Ma Thuot Coffee Association, told Reuters.
Higher prices have triggered faster sale which is reflected in Vietnam's export data. The country shipped 50,600 tonnes (843,000 60-kg bags) of coffee between November 1 and November 15, up 15.3 percent from the same period last year, according to Vietnam Customs data. This has brought Vietnam's total coffee shipment since the start of 2016 to 1.57 million tonnes, up 39 percent from a year earlier, the customs said.
Discounts for Vietnamese robusta grade 2 narrowed to $60-$65 a tonne to the January contract from discounts of $60-$70 last Thursday. Beans grade 1 screen 16, similar to the Sumatran coffee, stood at discounts of $10-$15 a tonne. Last week, the beans were quoted at par with the January contract to a discount of $10.
Vietnam's 2016/2017 output is forecast to drop 5 percent from the previous season to 26.88 million bags, but output could rebound to 28.77 million bags in 2017/2018, BMI Research said in a report on Wednesday. In Indonesia, premiums widened on declining stocks while trading was expected to remain slow due to year-end holidays, traders said. Robusta grade 4, 80 defects were traded at premiums of $40-$50 a tonne to the January contract, compared with premiums of $20-$30 last Thursday.
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