Vietnam's domestic coffee sales have picked up on higher global prices due to concerns over dry weather, while exporters have not rushed to sell to foreign buyers, traders said on Tuesday. The dry season has entered its peak in Vietnam's Central Highlands coffee belt, affecting nearly a fifth of the coffee farms, according to an industry report. The rainy season could arrive 10-15 days later than usual this year.
Robustas rose to 31,500-31,900 dong ($1.41-$1.43) per kg on Tuesday in Daklak, the country's top growing province, from 30,700-31,100 dong a week ago, trailing higher global prices fanned by concerns over dry weather in top producers Brazil and Vietnam.
May robusta settled up 0.8 percent at $1,438 per tonne on Monday.
At 31,900 dong, robusta price is at par with London's May contract and is the highest in Daklak since January 18, according to Thomson Reuters data.
The Central Highlands coffee belt has been facing the worst drought in three decades, with around 100,000 hectares (247,000 acres) of coffee facing water shortages, the Vietnam Coffee and Cocoa Association said in a report on Monday. The affected area makes up 17 percent of the region's coffee area.
"The lasting drought will have serious impact on the 2016/2017 coffee output," the report said but gave no specific forecasts on crop damages.
In Buon Ma Thuot, Daklak's capital, fresh water supply has now been interrupted regularly while water in hydro-power plants' reservoirs is nearing a level at which generators have to stop operation, said a resident and trader.
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