Sales of Vietnamese and Indonesian coffee are expected to pick up soon on the back of weakening currencies in top robusta producing nations, traders said on Thursday. Lower shipments in Vietnam, the world's biggest robusta producer, have added to a 6.2 percent fall in global robusta exports in the first nine months of the October 2014/September 2015 season. Demand for the bitter beans has raised robusta prices in top producer Brazil to the highest nominal price since 2001.
At 0900 GMT, ICE November robusta contract were down 1.17 percent to $1,695 a tonne on Thursday, after having closed down 1.4 percent the previous day. Soft commodities fell after China devalued its currency, prompting worries about a reduction in imports. Sales from Vietnam were slow as prices have been below expectations of 38,000-39,000 dong ($1.72-$1.77) per kg, independent analyst Nguyen Quang Binh said. The Vietnamese dong weakened by around 1 percent to 22,100 per dollar on Thursday, having lost 3.3 percent so far this year, after the central bank doubled the dollar/dong trading band to 2 percent to protects exports.
The dong fall, one of the slowest among Asian currencies, has given sellers an extra earning of around 300,000 dong ($13.6) a tonne. "Having heard of the Vietnamese dong fall, and more expected, traders will start selling," Binh said, referring to futures market trade. Activities in Vietnam slowed on Thursday, and robustas grade 2, 5 percent black and broken were quoted at premiums of $30-$50 a tonne to the November contract, against a premium of $50/tonne the previous day.
Beans grade 1, screen 16, equivalent to Sumatran beans, were offered at premiums of $90-$110 a tonne. In Indonesia, the rupiah hit its lowest since July 1998 on Wednesday, having lost nearly 10 percent so far this year, cheering up farmers, traders said. Sumatran robusta grade 4, 80 defects eased to $1,720-$1,740 a tonne, free-on-board Lampung, from $1,740-$1,760 the previous day, but still up from $1,670 a week ago.
Premiums stood at $70-$80 a tonne, against $70 a week ago. "I think they are expecting a further weakening of the rupiah to 14,000 (per dollar) before selling," a trader at a foreign commodities brokerage in Lampung said. Robusta arrivals in Lampung had declined to around 10,000 tonnes a week, compared to the 50,000 tonnes supplied in July, while the harvest could end in September, a month later than usual, traders said.