Supplies of Asia's robusta beans tightened this week as Vietnamese exporters held back from selling at lower global prices and Indonesia entered a long holiday, traders said. The ICE September contract edged down $17, or 1 percent, to close at $1,725 a tonne on Wednesday, erasing gains made over the past week. "Trading is very slow because exporters are not selling," a trader at a European firm in Ho Chi Minh City said on Thursday. "If they sell, they cannot buy on domestic markets."
Robusta beans eased to 36,700 dong ($1.68) per kg on Thursday in Daklak, Vietnam's largest growing province, from 37,300 dong the previous day. The beans stood at 36,100-36,900 dong per kg a week ago. With falling futures prices, premiums offered on Vietnamese robusta grade 2, 5 percent black and broken widened to $60 a tonne, free-on-board basis, from premiums of $40-$50 a week ago.
Grade 1 beans, screen 16 stood at premiums of $120-$130 a tonne, from premiums of $100-$110 a tonne last Thursday. Selling in Vietnam had already slowed in the past week, with buyers holding back as they eye the country's high inventory, traders said on Tuesday. Vietnam's June coffee exports dipped 1.2 percent from the previous month to 104,200 tonnes, bringing the country's shipments in the first half of 2015 to 684,500 tonnes, down 36 percent from a year ago, government data show.
Rival robusta producer Indonesia is on a public holiday over July 16-21 and most storage facilities have been closed prior to Thursday, traders said. Sumatran robusta grade 4, 80 defects was last quoted at $1,840-$1,860 a tonne, FOB Lampung, on Tuesday, unchanged from the previous week. Premiums for the grade were offered at around $80-$100 a tonne to the September contract earlier this week, up from a premium of $60 last Thursday. Indonesia's crop year runs from April to March of the following year, while the season in Vietnam begins in October and runs through September. Combined output from the two countries will account for about a quarter of the world's total production in the 2014/2015 season, based on USDA projections.
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