Premiums of Vietnamese coffee prices to London futures narrowed in recent days following falls in futures prices, and trading has slowed after a brief pickup late last week before a long holiday, traders said on Tuesday. Farmers have ended harvesting the 2011/2012 coffee crop in key growing areas and sold part of their stock last week to cover expenses for Tet, Vietnam's biggest festival to mark the Lunar New Year. All markets will close between January 21-29.
"There are some places where the harvest is still on, but all will be wrapped up this week before Tet holidays," a trader in Ho Chi Minh City said. "Farmers have sold beans (on domestic markets) more actively in recent days but exporters could not buy all the beans on offer because they do not have much funds to store beans for several weeks until their loading," he said.
On Tuesday robusta beans rose to between 37.3 million and 37.4 million dong ($1.78) a tonne in Daklak, Vietnam's top growing province, from 36.6-36.9 million dong per tonne. The rise tracked a gain in London's robusta futures market, where the March contract ended $22, or 1.2 percent, higher at $1,854 a tonne on Monday. It hit $1,712 last week, the lowest level for the benchmark second month since October 2010.
Premiums of Vietnamese robusta grade 2, 5 percent black and broken beans offered by exporters narrowed to $10-$20 to London's March contract, from $70 a tonne last week, for loading next month. Some deals were sealed on par with the March contract, traders said. Buyers sought to buy at discounts of $40-$50 a tonne to the March contract. The variety used mostly for making instant coffee ranged between $1,804-$1,874 per tonne, on a free-on-board basis, against $1,833 last Tuesday.
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