Trading on Asia's robusta coffee market has been slow in the past week due to lower stocks in producing nations, thin buying demand and a decline in global prices, traders said on Thursday. Declining stocks in Vietnam, the world's biggest robusta producer, after a 30 percent jump in coffee exports this season and an impending end to the crop year also contributed to slowing market activities, traders said.
The next harvest is due to start in late October. ICE September robusta coffee settled down slightly at $1,818 per tonne on Wednesday, while the November contract ended flat at $1,848 a tonne. Both the contracts have headed lower in the past week. "How can people buy when the market is still negative," said a trader in Lampung. "Trading has been fairly quiet and the coffee arrivals have started to decline."
However, there were still stocks in the market, he added. Premiums of Indonesian robusta grade 4, 80 defects narrowed to $20-$30 a tonne to ICE September, from premiums of $50-$60/tonne a week ago. The coffee market in Vietnam also lacked activities on thin buying demand by foreign firms, dealers said. "Closing to the end of the crop year the coffee stocks have declined and sellers stick to their offers, leaving not much for negotiations," a trader in Ho Chi Minh City said. The absence of many traders, who are away on summer holidays this month, has also lessened trading, while their return could boost purchases in September, said independent analyst Nguyen Quang Binh.