Vietnam, the world's top robusta producer, has stepped up selling to cash in on a surge in futures prices, while Indonesian farmers slowed sales at the end of the harvest, tightening supply, traders said on Thursday. The November robusta contract hit an eight-week peak on Wednesday, triggering sales of substantial Vietnamese stocks.
The contract has lost 26 percent in the past year, even thought global robusta output in the 2014/2015 crop year ended September dropped 3.7 percent from the previous season to 57.56 million 60-kg bags, according to data from the International Coffee Organization.
Vietnam's robustas grade 2, 5 percent black and broken were traded at a premium of $40 a tonne to the ICE January contract for loading in November/December, against a premium of $30-$40 early this week.
Beans grade 1 screen 16, similar to Sumatran coffee, stood at a premium of $90 a tonne, down from a $120 premium a week ago. "The market is still mostly quiet, only some selling took place as futures prices rose," a trader at a foreign firm in Ho Chi Minh City said, adding that most of the beans traded were from the previous 2014/2015 crop. Futures and differentials often move opposite. Old-crop beans are expected to dominate Vietnam's exports between now and December, traders said.
The country's coffee exports fell by a fifth in the 2014/2015 season to 1.26 million tonnes (21.02 million bags), according to government data. In Indonesia, Vietnam's robusta producing rival, supply has fallen to 3,000 tonnes this week from 9,000 tonnes a week ago, partly because a strengthening rupiah led prices at farmers' level to drop, said a Jakarta-based trader.
Robusta prices eased to 22,000 rupiah ($1.64) per kg this week, from 23,000 rupiah a week ago, as the Indonesian currency hit its strongest in more than four months on demand from foreign banks. "There is almost no activity. Even if there's an activity, the amount is very small, two to five containers," the trader said. Premiums of Sumatran robusta grade 4, 80 defects stood at $100 a tonne to ICE January, compared with premiums of $80-$100 a week ago, traders said.
Vietnam and Indonesia are the world's largest producers of robusta, used mainly for making soluble coffee. Indonesia imported nearly 10,000 tonnes of Vietnamese coffee in January-September, down from 15,600 tonnes a year earlier, Vietnam Customs data showed.