Asia coffee: Farmers hold off selling in Vietnam, tight supplies in Indonesia

HANOI: Supply of robusta beans tightened in Vietnam and Indonesia, with Vietnamese farmers refraining from selling the bean on hopes of higher profit, and scarce supplies in Indonesia at the end of the harvest season, traders said on Thursday.

Farmers in the Central Highlands, Vietnam’s largest coffee-growing region, sold beans at 133,700-135,000 dong ($5.23-$5.28), up from last week’s 131,000-133,000 dong.

“Vietnam remains the only source of robusta at the moment so farmers who are not short of cash tend to hold the beans for higher prices,” a trader based in the coffee belt said, adding it was extremely hard to buy now. “It is dry season now. But water resource for irrigation is still sufficient at this point,” the trader added.

According to Nguyen Ngoc Quynh, deputy head of the Mercantile Exchange of Vietnam, Brazil’s robusta beans output potentially would not meet expectations. “There is around one week left until the harvest of Brazil’s Robusta Conilon coffee, however, the weather forecast is not so favourable. Therefore, domestic coffee price will remain high, at 135,000 dong per kg,” Quynh said.

LIFFE robusta coffee for July closed at $5,443 per metric ton on Wednesday.

Traders also offered 5% black and broken-grade 2 robusta at a discount of $200 to the July LIFFE contract. In Indonesia, Sumatra robusta beans to the April contract were offered at $70-$80 discount, compared with the $100-$110 discount last week, one trader said, due to tight supply.

Another trader quoted a $80 discount to the May contract, narrowing from $100 discount a week ago.