Vietnam's coffee sales slow, Indonesia's February exports up

Coffee exports from Vietnam have been slow due to domestic speculators who bet on higher prices due to a smaller harvest, while Indonesia's harvest is gathering pace, traders said on Thursday. While Vietnam's coffee exports in March, projected at 90,000-110,000 tonnes, may be similar with shipment last month, robusta supply will rise from late this month as Indonesia begins its main harvest.
The two account for a quarter of the world's coffee exports. May robusta closed down 1.3 percent at $1,856 a tonne on Wednesday despite a 6-percent jump in arabica beans. Robustas widened to 38,000-39,500 dong ($1.78-$1.85) per kg on Thursday in Vietnam, with purchases mostly by small domestic speculators, traders said.
"Vietnam is not selling when it is below 40,000 dong per kg," a trader in Ho Chi Minh City said, referring to prices of the bitter beans used mainly for making soluble coffee. Robusta grade 2, 5 percent black and broken stood at par to a discount of $10 a tonne to ICE May contract, narrowing from discounts of $10-$40 a tonne early this week. Higher-quality beans grade 1, screen 16, equivalent to Sumatran beans, were at premiums of $50-$60/tonne to the May contract.
Growers often sell beans for cash during their watering process between February and early May, but sales this year have been slow, traders said. "Output from the 2015/2016 crop will be hit because of the rain during the harvest," said Do Ha Nam, deputy chairman of the Vietnam Coffee and Cocoa Association. "The Central Highlands is also facing dryness." Rain last November/December have caused unseasonal blossoms and the flowers did not last long, traders have said, but they added that early blossom happens annually.
"Now there is no impact on the crop and it is still early to see any damage," a trader said by telephone from Daklak, Vietnam's top growing province. In Indonesia, February robusta exports from Sumatra jumped 54 percent from the previous month to nearly 14,000 tonnes, based on government data, suggesting more supply from the early harvest. Sumatran robusta grade 4, 80 defects weakened to $1,900-$1,920 a tonne, free-on-board Lampung on Thursday, from $1,930-$1,950 a week ago. The beans stood at discounts of $10-$20 a tonne to the May contract for April/May loading, narrower from discounts of $20-$30 last Thursday.