HANOI: Indonesian coffee premiums tightened this week on upbeat supply during a mini harvest season, while regional rival Vietnam remained tepid due to lean demand, traders said on Thursday.
As supply increased during the harvest, premiums of Indonesia's grade 4 defect 80 robusta in main coffee-growing province Lampung dropped to $120 a tonne to London's July contract from $130 a week earlier, a trader said.
A few thousand tonnes of beans were traded this week, while the main harvest in the southern part of Sumatra is expected to start in June or July, a trader said.
"Trade will be busier in the coming weeks," he added.
Vietnam market extended its subdued sentiment as buyers eyed Indonesian and Brazil coffee, while farmers held on to the beans amid a drop in prices.
London's July contract on Wednesday hit its lowest level in two weeks of $1,730 a tonne, dragging coffee prices in Vietnam's top-growing province Dak Lak to 36,500 dong-36,700 dong ($1.60-$1.61) a kilogramme from 37,300 dong-37,600 dong last week, traders said.
Vietnamese traders quoted the 5 percent black and broken grade 2 robusta at a discount of $50-$100 to the July contract, compared with a $50 discount a week ago.
Customs data showed coffee exports from Vietnam, the world's second-most leading coffee producer, hit 200,210 tonnes in March, up 54 percent from a month earlier and higher than a government's estimate of 180,000 tonnes.
Traders, however, said the strong export figures were for previously signed contracts and shipments will decrease in the coming months. They expect April coffee exports from Vietnam to touch around 100,000-140,000 tonnes.
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