Sales of Vietnamese coffee slowed on Thursday after global prices eased overnight, but interest in the Vietnamese beans remained while harvesting has yet to pick up in Indonesia, traders said. Vietnam, the world's top producer of robusta, used mainly for making instant coffee, has sold nearly 60 percent of its 2015/2016 harvest by the end of April, according to government data. The buying pace is much faster than a year ago, suggesting ample stocks now being kept by foreign buyers, said traders.
"Domestic prices eased in line with London and thus premiums have widened a bit, so only some buyers who are short will have to buy now," a trader in Ho Chi Minh City said. ICE robusta futures ended lower on Wednesday, with July settling down 1.8 percent at $1,669 per tonne.
The contract has risen 5.4 percent so far this year, having hit a nine-month peak on Tuesday on concerns over prolonged dry weather in major producing countries. Premiums of Vietnamese robusta grade 2, 5 percent black and broken rose to $40-$60 a tonne to the July contract, from premiums of $20-$30 a tonne on Tuesday and $30-$40 a week ago. Robusta beans grade 1, screen 16, similar to Sumatran coffee, were quoted at premiums of $85-$105 a tonne, from premiums of $80-$85 last Thursday, said traders.
The Vietnam has exported nearly 1 million tonnes between October 2015 and last month, up 30.6 percent from a year ago, based on customs data, or nearly 60 percent of its harvest of 1.68 million tonnes. Stocks in Indonesia, Vietnam's robusta rival producer, have yet to rise before the harvest picks up next month, traders said. "There's still not very much in stocks," a trader in Bandar Lampung said.
Premiums of beans grade 4, 80 defects narrowed to $140-$170 a tonne to the July contract, from premiums of $120-$180 a week ago, according to traders. Differentials and futures often move in opposite way. Indonesia's 2016/2017 output is forecast to drop 15 percent from a year ago to 7.9 million 60-kg bags, as dry weather disrupted flowering and ripening, a US Department of Agriculture attache said on Wednesday. In a separate development, India's 2016/2017 coffee output is expected to drop by around a quarter to 263,000 tonnes, the lowest in nearly two decades, the head of an India's industry body said.