HANOI: Vietnamese robusta premiums were steady this week on thin buying demand for Asian beans even as the country’s coffee exports rose about a third as concerns over supply cuts from top producers Brazil and Colombia weighed, traders said. The world’s second-biggest producer exported an estimated 16.2 million 60-kg bags between October and this month, up 27.4 percent from a year ago, government data showed.
Concerns over short supply from Brazil and Colombia, which drove futures prices to a five-month high of $1,602 a tonne on April 21, have also contributed to the higher export volume in Vietnam. ICE July robustas settled down 1 percent at $1,573 per tonne on Wednesday.
Premiums of Vietnamese robusta grade 2, 5 percent black and broken stood at $50-$60 a tonne to the July contract, against premiums of $40-$60 early this week. Robusta grade 1, screen 16, similar to Sumatran coffee, stood at premiums of $100-$105 a tonne, or about half that of Indonesian coffee prices. “Buyers are not short, so their purchase is slow,” a trader at a European firm in Ho Chi Minh City said on Thursday.
Traders said they were monitoring the impact of the dry weather on Vietnam’s next crop, the output of which could drop 30 percent as forecast by the Vietnam Coffee and Cocoa Association. The forecasts were often underestimates in an attempt to boost prices, traders said. While surveys by several foreign trading firms in Vietnam showed 2016/2017 output may drop 10 percent on average, BMI Research has forecast the country’s production to rise 3 percent to 29.14 million bags.
In Indonesia, premiums of beans grade 4, 80 defects stood in a wide range of $200-$280 a tonne, against a premium of $200 a tonne last Thursday. “Robusta price didn’t change from last week,” said an exporter in Lampung, adding that there were not many buyers. The global market surplus will extend to the next 2016/2017 season after production reached 153 million bags and consumption was at 151 million bags this year, the World Bank said in a commodity market report published on Wednesday.
“Based on early assessments, 2016/17 will be another surplus production year, which combined with depreciated exchange rates by Brazil and Colombia, makes the coffee outlook bearish,” the report said. It projected a 6-percent price drop for arabica and a 12-percent decline for robusta, against 2015.
