Asia Coffee: Vietnam prices down ahead of Lunar New Year holiday
Asia Coffee: Vietnam prices down ahead of Lunar New Year holiday
Vietnam’s coffee prices fell on Thursday ahead of a week-long Lunar New Year holiday early next month, while Indonesian premium widened on empty stock.
Traders forecast Vietnam’s January coffee exports will fall to 150,000 tonnes from 153,906 tonnes in December.
Markets, businesses and government offices in Vietnam, the world’s largest robusta producer, will close during the first week of February for the holiday, locally called Tet.
“Many coffee farming and processing firms in the Central Highlands have started allowing their workers to go home for Tet and I think trading activities won’t pick up until after the holiday,” said a trader based in Dak Lak province.
Farmers in the Central Highlands, the country’s key coffee growing area, sold coffee at 32,900-33,600 dong ($1.42-$1.45) per kg on Thursday, down from 3,500-34,000 dong a week earlier.
“Farmers will hold their beans if prices stay low, but I think they won’t be able to hold for long, given that Brazil is expected to start their robusta harvest sometime in April,” the trader said.
Traders in Vietnam offered 5 percent black and broken grade 2 robusta at a $20-$30 per tonne discount to the March contract, compared with $40 discount last week.
Government customs data released last week showed Vietnam exported 1.88 million tonnes of coffee in the calendar year 2018, up 19.9 percent.
In Indonesia, premium for the grade 4 defect 80 robusta widened to $50-$60 to the March contract on Thursday, after staying at $20-$30 for four straight weeks.
However, trade remained muted as inventory in Indonesia’s province of Lampung has run empty, a trader in the province said.
“Trade is expected to pick up pace in coming months as some areas in southern Sumatra will pick beans in a mini harvest around April,” the trader said.
