Vietnam domestic prices edge lower; storm impact muted

HANOI/BANDAR LAMPUNG: Domestic coffee prices in Vietnam continued to edge lower this week on rising supplies from an ongoing harvest that was not impacted by tropical storm Usagi that made landfall in the country over the weekend.

A Vietnam coffee association official said last week he was concerned that heavy rain triggered by the storm might disrupt the harvest in the Central Highlands, the country's largest coffee growing area.

Traders, however, said on Thursday that the storm did little harm.

"It rained for just a day and the harvest is not impacted," a trader based in Dak Lak province said. "Framers have harvested around 45 percent of the new beans."

Farmers in the Central Highlands sold coffee at 35,200 dong ($1.51) per kg <COFVN-DAK>, slightly down from 35,300 dong a week earlier, traders said.

"But I think prices won't fall much further as the 2018-19 output won't be as high as previously forecast," the trader said.

Traders in Vietnam offered the 5 percent black and broken grade 2 robusta <COFVN-G25-SAI> at a $50-$70 discount per tonne to the January contract, widening from $45-$65 last week.

The London January futures contract closed at $1,615 on Wednesday, flat from a week earlier, Refinitiv Eikon data showed.

Coffee exports from Vietnam in November are forecast to have risen 33.7 percent from a year earlier to 140,000 tonnes, government data released on Thursday showed. This would raise shipments in the first 11 months of this year to 1.73 million tonnes, a year-on-year increase of 23 percent.

In Indonesia, transactions for Sumatran robusta in Lampung province remained light this week, with weak demand, traders said.

"Those who have coffee stocks will likely keep them until the new year to wait for better pricing," a trader in Lampung said.

The premium for robusta beans in Lampung stood at $20-$30 to the January contract this week, the trader added, unchanged from last week. A second trader said the premium narrowed to $30-$50 to the January contract, from $50 a week earlier.