Trade slows in Vietnam, supplies build up in Indonesia

Coffee trading was sluggish in Vietnam this week, with domestic prices falling further following global cues and rising supplies from other robusta producers, while prices flipped to a premium in Indonesia amid the ongoing harvest.

Farmers in the Central Highlands, Vietnam's largest coffee-growing region, sold beans  at 113,500 to 114,000 dong ($4.35 to $4.37) per kilogram, lower than the 121,700-122,300 dong range a week ago.

"Activities are not very upbeat," said a trader based in the coffee belt.

"New supplies from Indonesia, Brazil and now Uganda are coming. A bean shortage is not really an issue at the moment."

Traders expect the prices to fall further in the coming weeks.

The robusta harvest in Brazil is progressing well, with the weather generally favorable and a large crop widely anticipated.

Robusta coffee on the London International Financial Futures and Options Exchange (LIFFE) settled up $8, or 0.2 percent, at $4,345 a ton on Wednesday after hitting the lowest level in nine-and-a-half months the day before, London Stock Exchange Group data showed.

Traders offered five percent black and broken-grade 2 robusta  in the range of $40-$80 per-ton premium to the September LIFFE contract.

Indonesian Sumatra robusta coffee beans were offered at an $80 premium this week to the July-August contract, one trader said, adding that "beans have been harvested in several areas".

Another trader quoted an $80 premium to the September contract, compared with a $30 discount two weeks ago to the July contract.

Reuters