Vietnam’s domestic coffee prices drop to multi-month lows on higher supply

HANOI: Vietnam’s domestic coffee prices fell to their lowest level since March last year, tracking global trends, as supply increased and favourable weather supported cherry-picking and drying amid weak demand, traders said on Thursday.

In the Central Highlands, farmers sold beans at 88,700 dong to 90,000 dong (USA3.37 to USA3.42) per kg, down from last week’s 101,300 dong to 102,000 dong.

Robusta coffee for March delivery lost USA294 from the beginning of this week to USA3,705 per kg by Wednesday’s close, its lowest level since August 8, LSEG data showed.

“Farmers are picking the remaining cherries and have released more beans in recent days, though not in large volumes as they are under little pressure to sell,” a trader in the coffee belt said. “At the same time, exporters remain very cautious,” the trader added. Another trader said output has been mixed in the Central Highlands this crop year.

“Farmers in Dak Lak, the main coffee-producing province, reported higher yields, while the neighbouring provinces of Lam Dong and Gia Lai have seen less favourable results,” the second trader said. Traders offered 5percent black and broken-grade 2 robusta at a discount of USA225 to USA275 per ton to the March LIFFE contract.

In Indonesia, Sumatra robusta coffee beans were offered at a USA120 premium to the January contract this week, dropping from a USA209 premium last week “due to a crash on the London terminal”, one trader said. Another trader quoted a USA300 premium to the March contract, compared with a USA100 premium a week ago.

Coffee farmers from West Lampung said that ongoing rainfall in the region may threaten the growth of coffee plants and could affect the August harvest.

“Next year’s coffee harvest will likely decrease by around 30 percent to 40 percent,” one farmer said.