Coffee-Vietnamese farmers sell; Indonesia demand up ahead of Ramadan

By Mai Nguyen

HANOI, April 19 : – An increase in London prices prompted Vietnamese farmers to sell more coffee, while Indonesia’s premiums stayed flat during a mini harvest season on solid domestic demand, traders said on Thursday.

London’s July contract on Wednesday hit its highest in two weeks of $1,774 a tonne, pushing domestic coffee prices in Vietnam to 37,000-37,300 dong ($1.62-$1.64) per kg from 36,500-36,700 dong last week, traders said.

Vietnamese traders quoted the 5 percent black and broken grade 2 robusta at a discount of $60-$90 to the July contract, compared with a 50-$100 discount rage a week ago.

Traders expected there were some 35-40 percent beans left from the previous harvest in Vietnam. Farmers have been selling due to a pickup in prices and to get cash for fertiliser and watering coffee trees for the current crop.

In regional rival Indonesia, which is having a mini harvest, traders said market was subdued amid strong global supply, but prices were afloat on strong domestic demand.

“Trade is not progressing yet because global market is being flooded with Vietnam beans right now, while Lampung is also having a harvest,” said a trader in Lampung, Indonesia’s main coffee growing province.

Premiums of Indonesia’s grade 4 defect 80 robusta stayed flat at $120-$150 a tonne to London’s July contract, traders said.

Indonesia’s 2018 coffee output is seen falling to around 500,000 tonnes from 615,000 tonnes last year, while exports could also decrease on rising domestic consumption, chairman of the Association of Indonesian Coffee Exporters and Industries (AICE), Irfan Anwar, said.

Exports in the first quarter from Lampung dropped an estimated 72.6 percent to 11,665 tonnes of coffee beans from the same time last year, official data showed.

Instant coffee makers in Indonesia, the world’s most populous Muslim-majority country, have been ramping up purchases for months ahead of Ramadan, when coffee demand normally increases, an official with the AICE said.

/Reuters

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