Coffee prices at record high in Vietnam as dry weather drives supply concerns

HANOI/BANDAR LAMPUNG: Vietnamese coffee prices rose to an all-time high this week, supported by exceptionally tight supplies and concerns dry weather would reduce next year’s crop, traders said Thursday.

Farmers in the central highlands, Vietnam’s largest coffee-growing area, were selling beans for 98,100-100,200 dong ($3.96-$4.04) per kg, up from 93,000-94,200 dong range a week ago. A trader based in the coffee belt said farmers had sold most of their stocks and were unwilling to cut prices as people were still willing to buy.

The trader also cited the prospect of “less rainfall and higher temperatures” in the coffee growing area, which may reduce output in the next season.

Robusta coffee for May delivery settled up $92, or 2.7%, at $3,467 per metric ton on Wednesday. Traders offered 5% black and broken-grade 2 robusta at a premium of $600-$620 per ton to the May contract. “With the current low supply situation and negative new crop supply prospects, Vietnamese farmers and traders are still in a

‘stockpiling’ mood,” Mercantile Exchange of Vietnam said in a note earlier this week.

“Due to the supply shortage, there is a high possibility that Vietnamese coffee exporters will limit signing new orders in the second quarter of this year,” it added.

Indonesia’s Sumatra Robusta coffee beans for the April contract were offered at $720 premium, down from $820 premium last week, a trader said, saying the reason was a sharp increase in stocks in London.

Another trader said for the May contract, the price was $750 premium, unchanged from last week.

Indonesia’s Sumatra robusta coffee bean exports in February reached 3,221.2 metric tons, data from the local trade office showed on Thursday, down 73.19% from the same month last year.