Discounts of Vietnamese coffee widened on Thursday as local prices hit their highest since May 2013, while differentials were little changed in Indonesia at the end of the harvest season, traders said on Thursday. Harvesting is expected to peak up in a month in the Central Highlands coffee belt of Vietnam, the world's top robusta producer, boosting supplies of the bitter variety used mostly for making instant coffee.
Robusta futures rose to a 20-month high this week and are likely to stay buoyant, with traders expecting Vietnam's output to fall by up to 15 percent due to a drought early this year. ICE November robusta settled up 0.5 percent at $2,038 per tonne on Wednesday after tapping $2,042, the highest for a spot contract since February 2015.
Tracking the gain, robusta prices in Vietnam edged up to 42.1 million to 42.7 million dong ($1,887-$1,914) per tonne on Thursday, the highest since late May 2013, after touching $1,906 a tonne the previous day. "It's difficult to buy now from farmers," said a trader with a foreign firm in Ho Chi Minh City. "As London prices are rising, many are not willing to sell now." Discounts of Vietnamese robusta grade 2 widened to $30-$40 a tonne to the ICE January contract from discounts of $25-$30 last Thursday.