HANOI/BANDAR LAMPUNG: Coffee bean sales in Vietnam and Indonesia picked up this week on a strong recovery in global prices, while the main harvest is awaited next month in Vietnam, traders said on Thursday.
Exporters offered Vietnam's 5-percent black and broken grade 2 robusta at $50-$60 discount per tonne to London's January contract, compared to $30-$40 discount last week, traders said.
Farmers in the Central Highlands, Vietnam's largest coffee growing area, offered coffee at 36,500 dong ($1.56) per kg, up sharply from 34,000-34,400 dong last week, following global cues, traders said.
The London's January robusta future contract rose $112 in a week to $1,698 on Wednesday.
Weather in the Central Highlands was favourable ahead of Vietnam's major harvest, which could come as early as next month, after weeks of extended rains that raised concerns about bean quality and the harvest among traders.
In rival Indonesia, premiums for the grade 4 defect 80 robusta fell to $30 a tonne to the January contract from $70 premium last week, also following a sharp rise in global prices, a trader said.
"Terminal (London) prices are very high, the differential must come down," the trader said, adding many exporters in Lampung, Indonesia's main coffee growing region, were selling their stocks this week despite smaller premiums.
The International Coffee Organization (ICO) earlier this week switched its forecast of a global coffee deficit of 3.56 million bags in the 2017/2018 season to a surplus of 2.58 million bags.
ICO also raised its estimate for global coffee production in 2017/18 to 164.81 million 60-kg bags from 158.56 million bags earlier, and raised the season's global robusta production estimate to 62.99 million bags from 61.40 million bags.
Vietnam, the world's second-biggest coffee producer, exported 1.795 million tonnes (29.9 million 60-kg bags) of coffee in the 2017/18 crop year, an increase of 12.3 percent from the previous crop, customs data showed earlier this week.
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