HANOI: A rally in global coffee prices has triggered sales in Vietnam, the world’s largest robusta producer, and narrowed offered premiums there, while exports from Indonesia have also soared, traders said.
ICE coffee futures rose on Wednesday, with arabica prices seeing their biggest increase in more than three months on chart-based buying. Robusta coffee futures also gained and the September contract ended up 3.6 percent at $1,818 a ton.
In Vietnam, a kg of robusta rose to 38,100-39,200 dong ($1.75-$1.80) on Thursday in the country’s top growing province of Daklak. The 39,200 dong price is the highest since April 24. The price stood at 37,000-38,100 dong a week ago.
“Many more export firms are making quotations now, while buying is still moderate,” a trader at a foreign firm in Ho Chi Minh City said.
Premiums for Vietnamese robusta grade 2, 5 percent black and broken narrowed to $25-$30 a ton to the September contract, from $40-$55 a ton earlier this week and $50-$60 a week ago.
Grade 1 beans, screen 16 stood at premiums of $85-$90 a tonne, below the range of $110-$120 last Thursday.
Vietnam’s 2014/2015 stocks may still be around 12 million bags, or double the volume a year ago, based on government data and traders’ estimates.
An increase in sales in Vietnam may reduce US traders’ interest in importing robusta beans from European warehouses.
Indonesia, Vietnam’s robusta rival, which has been harvesting its 2014/2015 crop, is also exporting more beans, based on government data.
On Thursday it revised up its May robusta export volume from the main growing area of Sumatra to 14,707 tons from 14,540 tons.
That brought Sumatra’s exports in the first two months of the current crop to 37,699 tons, a surge of 78 percent from a year before. Indonesia’s crop year runs from April to March.
Sumatran robusta grade 4, 80 defects rose to $1,900-$1,920 a ton, free-on-board Lampung, from $1,850-$1,870 last week.
Premiums on the beans — equivalent to Vietnamese robusta grade 1 — were offered at $50 a ton to the ICE September contract, making them cheaper than Vietnamese robusta.
The US Department of Agriculture (USDA) said favorable weather during the flowering and fruit setting period was likely to boost Indonesia’s 2015/2016 crop by 25 percent from last year to a record 11 million bags.
