Asia's coffee market slowed this week as Vietnam held back its fresh stocks following global price falls while Indonesian exporters were not keen on nearby shipment, waiting for the next harvest to peak in March, traders said on Thursday. London's March robusta contract closed $8 lower at $1,903 a tonne on Wednesday before the futures market closed for the Christmas holiday. Trade will resume next Monday.
The market is expected to dip slightly at its reopening, said independent analyst Nguyen Quang Binh. The contract has lost 8 percent so far this month, due partly to news of rain relieving trees in Brazil. Vietnam, the world's top robusta producer, has harvested about 80 percent of its 2014/2015 crop but lower prices discouraged farmers and exporters from selling, traders said.
Vietnamese robusta grade 2, 5 percent black and broken was offered at par to discounts of up to $40 a tonne to the March contract, compared with discounts of $30-$50 a tonne last week. Higher-quality grade 1, screen 16 beans, equivalent to Sumatran beans, was quoted at premiums of $50-$60 a tonne to the March contract. Last week the beans stood at par to a premium of $30 a tonne.
Vietnam's harvest is due to end this month, while a small crop harvest in rival robusta producer Indonesia has yet to boost stocks. The two account for around a quarter of the world's production in the current 2014/2015 season. Many traders in Vietnam and Indonesia are also on holiday.
Sumatran robusta grade 4, 80 defects were quoted at par to the March contract for loading in March or April 2015, compared with a premium of $40 a tonne last week. "Indonesian beans have become cheaper than Vietnamese beans now, but exporters are not keen to ship anything nearby," said a trader at a foreign firm in Ho Chi Minh City, whose company also deals with Indonesian coffee. Global 2014/2015 production will dip 1.77 percent from last year to 149.8 million 60-kg bags due to lower output in Brazil, Peru, Indonesia and Vietnam more than offsetting gains in Central America and Colombia, the US Department of Agriculture said on December 19.
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