Coffee supply in Indonesia is expected to dip in September from a month earlier as the peak harvest season draws to a close, while Vietnam market remained subdued, traders said on Thursday. Robusta beans in Indonesia's Lampung province were traded at a premium of $50-$120 to the London November contract, the same as last week, amid more supplies during harvest while London prices declined, traders said.
The trading volume is healthy this week as the area enjoys its peak harvest season before supply starts to fall next month, traders said. Indonesia's 2018/2019 coffee bean output seen at about 660,000 tonnes, up 15.8 percent from the 570,000-tonne output of the previous crop year, an official of the country's Association of Coffee Exporters and Industries said earlier this week.
Exports from Indonesia, Southeast Asia's largest economy, is seen rising 6.4 percent to 500,000 tonnes this year, the official said. Trading in Vietnam, the world's second-biggest coffee producer after Brazil continued to be tepid towards the end of the 2017/2018 crop season, which terminates next month. Bean prices in the Central Highlands, Vietnam's main coffee-growing region, were around 34,000 dong-35,000 dong ($1.46-$1.50) per kg, steady compared with a range of 34,500 dong-35,000 dong a week earlier, traders said.
Vietnam's 5-percent black and broken grade 2 robusta was traded at $90-$100 per tonne discount to the London November contract, compared with last week's discount of $80-$110, traders said. Production in Vietnam was pegged at 28.5 million bags in 2018/19, according to a Reuters poll, down from a record 29.5 million bags the prior year, International Coffee Organization data showed. Estimates for Vietnam production ranged from 27 million bags to 32 million bags.
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