Trade in Vietnam's coffee market took a hit on a lack of quality beans at the end of the crop season, while growers in Indonesia held on to stocks, traders said, keeping supply tight in Asia's top two coffee exporters. Vietnam's main coffee growing region suffered from unusually heavy rainfall in December last year, hurting supply and bean quality and resulting in an annual fall of 16 percent in coffee exports volume in the first seven months of 2017.
Exporters kept off from signing new contracts, fearing a similar weather challenge this year, while importers, who were mostly away on holiday, sought more high-quality beans, traders said on Thursday. Vietnam, the world's biggest robusta producer, exported 110,000 tonnes of coffee in July, bringing total exports in the first seven months of this year to 941,000 tonnes, government data showed.
Local coffee prices in Vietnam rose slightly to 46,000 dong-46,500 dong ($2.02-2.05) per kg, compared with 46,000 dong a week earlier, traders said, reflecting an increase in the London ICE November futures contract, which rose 1.5 percent to close at $2,136 a tonne on Wednesday. Traders said the 5-percent black and broken grade 2 robusta variety traded at a discount of $50-$100 to the ICE November contract, reversing from last week's $10 premium.
In Indonesia, the robusta grade 4 defect 80 variety traded at a $15-$20 discount to the ICE September contract, compared with a $20 discount to $10 premium a week earlier. Coffee growers, who hold an estimated 100,000 tonnes of beans from the recent harvest, were holding on to stocks as they were not in a rush for cash, traders in Indonesia's main growing area of Lampung said.
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