Coffee trading was slow as Vietnamese farmers were hesitant to unload new beans before price and weather outlooks become clear ahead of the harvest peak that starts late next month, traders said on Tuesday. Coffee prices in Vietnam's key growing province of Daklak widened to 24,500-25,200 dong ($1.37-$1.41) per kg on Tuesday, back to the same level a week ago and up from 24,200 dong at last week's close, after London robusta futures gained on Monday.
The November contract ended $1 higher at $1,461 a tonne, bolstered by the weak dollar. "Farmers and exporters were selling slowly and they did not sell under a contract with delivery too far ahead as they watched price moves," said a trader in Ho Chi Minh City, Vietnam's largest market for trading the commodity.
He estimated Vietnam had so far sold 200,000 tonnes of coffee for future loading under the new 2009/2010 crop year that started this month, compared with an estimated 300,000 to 400,000 tonnes sold at the same time last year.
The discount to London's levels narrowed to between $100 and $110 a tonne this year from $160 to 200 a tonne late last October. The discount is imposed by buyers of Vietnamese coffee to offset uncertainties in quality and time of delivery. Discounts narrowed to $140 a tonne in early February after the harvest ended, making it difficult for exporters to buy on domestic markets while farmers regretted early sales. Vietnamese robusta grade 2, 5 percent black and broken, rose on Tuesday to $1,390 to $1,400 a tonne, free on board basis, for delivery from December, from $1,300 a tonne a week ago.