Vietnam's coffee harvest picks up, Indonesia's stocks decline

Vietnam's coffee harvest picked up this week after rain in key growing regions stopped, and could end a month earlier than usual as farmers seek to benefit from higher prices, traders said on Thursday. Harvesting in the Central Highlands coffee belt resumed this week, while prices at their highest levels since late October 2014 have lifted sentiment of coffee growers in the world's top robusta producing nation.
January robusta futures settled up 2.3 percent at $2,133 per tonne on Wednesday with the market underpinned by tight supplies following poor crops in Indonesia and Brazil and the prospect of a smaller harvest in Vietnam. The contract touched $2,199 a tonne on Monday, the highest since October 2014.
Gains on the robusta futures market have in turn boosted Vietnamese coffee prices. Robusta prices rose to 44.0-44.4 million dong ($1,971-$1,989) a tonne on Thursday in Daklak, the country's top growing province, up around 6 percent since the 2016/2017 crop year started on October 1.
"The harvest has returned to the normal pace and is expected to finish by the end of December," a trader with a foreign firm said while touring the Central Highlands. The harvest often ends in January. He said cherries looked good and the output drop would be smaller than previously expected. Last week an official of the Vietnam Coffee and Cocoa Association cut the 2016/2017 output loss to 10-20 percent from 20-25 percent.
Vietnamese robusta grade 2 were traded at discounts of $30-$40 a tonne to the ICE January contract, narrowing from discounts of $50-$60 a tonne last Thursday. Beans grade 1, similar to the Sumatran coffee, were quoted at premiums of $10-$20 a tonne, compared with a discount of $10 a tonne last Thursday. In Indonesia, Vietnam's rival producer, stocks declined while trading slowed, traders said.
"Today trading is very quiet since we have entered November, stocks are starting to diminish and London terminal prices continue to fluctuate," the trader said. Indonesian robusta grade 4, 80 defects ranged from par with the ICE January contract to a premium of $30 a tonne, while last week they were at par with the contract. October coffee exports from Sumatra, Indonesia's main growing area, dropped 43 percent from a year ago to 22,270 tonnes, government data showed.