Asian coffee: Vietnam prices steady, Indonesia's output falls

Trading in Vietnamese coffee has this week been limited as high domestic prices keep export quotations in the world's top robusta producing nation well above global levels, traders said on Thursday.
Supply in Indonesia is also thin before the main harvest begins next month, while prices are still below Vietnamese robusta despite a forecast of smaller output due to dry weather, traders said.
While arabica prices rallied on the weak US dollar and a forecast of smaller crop in Brazil, the May robusta contract closed down 0.1 percent at $1,816 a tonne on Wednesday.
Vietnamese robusta grade 2, 5-percent black and broken was quoted at premiums of $50-$60 a tonne to ICE July contract, narrower than a premium range of $50-$70 last Thursday, while some buyers bid a premium of $40 a tonne.
"Only those who are really short now are buying," said a trader in Ho Chi Minh City.
Premiums of beans grade 1, screen 16, equivalent to Sumatran beans, stood at $110-$120 a tonne to the July contract.
In domestic markets, robusta stood at 38,300-39,500 dong ($1.78-$1.84) per kg, making the export quotation at up to $1,890 a tonne, free-on-board (FOB) basis, above foreign buyers' bids.
"Farmers are selling very slowly and what comes to the market is bought up by FDI firms," a second Vietnamese trader said, referring to foreign firms which have set up warehouse and processing facility in the country.
In Indonesia, harvesting will not pick up until April, while both output and shipment this year are projected to fall from 2014, traders and an industry official said.
As much as 300 tonnes of fresh beans had been arriving at market each day, or just one third of the volume traded on Vietnam's domestic markets this week, traders said.
Vietnam and Indonesia account for a quarter of the world's coffee exports.
Indonesia's output is expected to fall to 650,000-700,000 tonnes in 2015 from 711,513 tonnes last year, while the country's export volume could drop nearly 9 percent to 350,000 tonnes, a senior industry official said.
Sumatran robusta grade 4, 80 defects were quoted at $1,880-$1,900 a tonne, FOB basis, against $1,890-$1,900 a week ago.