Asia coffee trade slow after holidays; Indonesian exports drop

Friday, 5 January 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Major Asian coffee markets saw little activity this week as trade resumed after the New Year holidays, while Indonesian exports declined for a fourth straight month in December.

Shipment of coffee beans from Lampung province, Indonesia’s main coffee growing area, fell 71% year-on-year in the last month of 2017 to 8,649.1 tonnes, local government data showed.

The drop in December was due to a lack of supply, Muchtar Lutfie, head of research at Indonesia’s coffee exporters association (AEKI) in Lampung, said.

“There were no more beans at farmers’ warehouses. There was no more trading except to fulfil some contracts,” Lutfie said.

Indonesia’s March robusta contract traded at a $ 160 premium this week, unchanged from last week. No deals were struck as some traders are still on vacation, a trader in Lampung said

Trading in Vietnam was modest as the market reopened after the new year, traders said.

The harvest in Vietnam’s Central Highlands coffee belt was completed due to supportive weather, but low robusta prices in London have discouraged farmers from selling beans, said Phan Hung Anh, a deputy director at Daklak-based Anh Minh Co.

“Prices fell as this crop year started, therefore the market has been quiet. Farmers hoped that prices would go up. At the moment they will only sell beans when they need money,” Anh said.

Another trader in Ho Chi Minh City said some farmers had sold beans this week at slightly higher prices tracking an uptick in the London market.

Farmers in Vietnam’s major coffee-growing Daklak province quoted coffee beans <COFVN-DAK> at 37,000-37,300 dong per kg, slightly higher than last week’s range of 36,500-37,000 dong, traders said.

The London ICE March robusta coffee settled up $ 2, or 0.12%, at $ 1,735 per ton on Wednesday.

Traders quoted the 5% black and broken grade 2 robusta at a discount of $ 60-$ 65 per ton to the ICE March futures contract, compared with a discount of $ 50-$ 70 per ton a week earlier.