Vietnam's coffee market fell as traders refused to buy expensive, scarce domestic beans amid easing global prices, while the market was steady in Indonesia, traders said on Thursday. Robusta grade 2, 5 percent black and broken, in Vietnam, the world's top robusta producer, were quoted at discounts of $10-$20 a tonne to ICE September contract, which settled down 0.4 percent at $1,804 per tonne on Wednesday. That's down from parity to the futures earlier this week.
"No one dares to export at that price because domestic beans are just too expensive now, with stock at only about 5 to 7 percent left," said Le Tien Hung, general director of SIMEXCO, a leading exporter in Daklak, the country's largest growing province. "Even with a $30 discount to ICE November contract, no one sells; for me, I can only sell at zero discount," Hung said, adding the next round of fresh beans will arrive at the end of November or early December.
Prices of Vietnamese beans surged as domestic supply almost ran out at the end of the season and amid the country's worst drought in decades, with growers selling at 38,700 dong to 39,000 dong ($1.74-$1.75) per kilogramme. Vietnam's coffee prices hit over one-year high earlier this month while the country's 2016/2017 output of the bean is seen falling 20 percent to 25 percent from the previous harvest.
Premiums of Indonesian beans grade 4, 80 defects ranged between $10 and $50 a tonne this week for September contract, compared to $10 last week, traders said. "Today we set prices at premiums of around $10 to $50, but there are also exporters out there who are being greedy and selling at $50 to $60 premium," one exporter said. "It all depends on each exporter if he or she wants to sell or hold them," the trader said.