Vietnam's domestic coffee prices fell as weaker London futures and ample supply overshadowed recent rainfalls and a pickup in export orders after the New Year holidays.
Discount on Robusta grade 2, 5-pct black and broken in Vietnam tightened to $70 per tonne below the ICE March contract on Tuesday, while local prices fell to 45,000-45,500 dong ($1.99-$2.02) per kg from 46,200 dong on Thursday. The March contract closed at $2,141 per tonne on Monday, falling from a near two-month closing high reached a week ago, Thomson Reuters data showed, dragging local prices in Vietnam amid solid supply.
"Harvesting is about 90 percent completed now and the rest should be done before Tet," said a trader at a foreign company in Vietnam, referring to the Lunar New Year, Vietnam's longest holiday from January 26 to February 1 this year. Overseas orders have returned after the Christmas and New Year holidays, he added. Traders expect coffee exports from Vietnam, the world's biggest robusta producer, to pick up to 180,000 tonnes this month, from 160,000 tonnes in December.
But the market is not too upbeat as some farmers still hold beans amid expectation of better prices. "Farmers are still selling, but at a slower pace than last year farming cost this season is high, so there may not be much profit at this price," said Van Thanh Huy, chairman of Inexim Daklak Company.
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