Indonesia's coffee premiums rose this week as the rupiah recovered from two-and-a-half-year lows against the dollar, but a rising supply during harvest capped the premiums, traders said on Thursday. Premiums for Indonesia's grade 4 defect 80 robusta rose to $50 a tonne to London's July contract , from $40 a tonne a week earlier, a trader in Bandar Lampung said.
The rupiah last month hit its weakest in over two years against the dollar amid global market volatility, but since then have recovered some of its losses. It has gained 2.4 percent since it hit 14,210 on May 24, the weakest since October 2015. Supply from the main harvest was solid, with "good" volume of transactions this week, the trader said. Indonesia will go on a long holiday for Eid Al-Fitr, from June 11 to June 20.
In Vietnam, bean prices offered by traders in the Central Highlands, the country's main coffee growing region, edged higher to 36,500-37,000 dong ($1.60-$1.62) per kilogram, from 36,500 dong last week, traders said. But farmers were hesitant to sell beans due to low inventory hold by farmers at the end of the crop year, while weak demand from importers thwarted new exports deals. Discounts for Vietnam's 5 percent black and broken grade 2 robusta were offered by exporters at $60-$70 a tonne to the September contract, compared with an $80 discount a week ago, traders said. Vietnam's harvest season is usually in late October to December. Traders said the upcoming crop looks healthy thanks to solid water supply so far this year.
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