Coffee sales were slow and premiums stable as Vietnamese growers were reluctant to release stocks as the dry season peaked and on slack demand due to a long market holiday, traders said on Tuesday. Farmers in the Central Highlands coffee belt have been hit by the widening impact of the worst drought in three decades brought on by the El Nino weather pattern. Vietnam is the world's largest robusta producer.
"Prices are standing still, while selling is slow due to holidays," a trader at a European firm in Ho Chi Minh City said. Trading of robusta coffee on ICE Futures Europe resumed on Tuesday after market holidays since last Friday. The July contract fell 0.2 percent to $1,519 a tonne at 1011 GMT after having ended down 1.55 percent at $1,522 last Thursday.
The bitter beans used mostly for making instant coffee stood at 32,600-33,200 dong ($1.46-$1.49) per kg on Tuesday in Daklak, Vietnam's largest growing province, below the 11-week high hit last Thursday at 33,500 dong. Water shortages are threatening 167,000 hectares, or 29 percent of the Central Highlands' total coffee area, of which 40,000 hectares have been damaged, the Vietnam Coffee and Cocoa Association, or Vicofa, said in a statement on Tuesday.
More damage to the 2016/2017 crop is expected, given the ongoing drought, Vicofa said.In some areas growers have been waiting longer for water in the wells to rise again during their current tree watering phase, he said, adding that it was still early to give any figures on output damage. Coffee growers have been holding back stocks in anticipation of higher prices due to the dry weather, traders said.
Comments
Comments are closed.