Discounts of Vietnamese coffee were steady on Thursday, with sales slowing as stocks dwindled ahead of the harvest peak next month, while Indonesia were up slightly, traders said. Vietnam, the world's top robusta producer, will accelerate harvesting its 2016/2017 coffee crop from next month, which could provide further relief to robusta futures prices which hit a two-year peak this week.
January robusta coffee settled down 1.1 percent at $2,129 per tonne on Wednesday, after climbing to $2,161, equalling the prior session's two-year peak. Vietnamese robusta prices eased to 43.3 million to 43.9 million dong ($1,941-$1,968) per tonne, from 44.3 million dong the previous day which was at par with prices during the week ended April 26, 2013, based on Thomson Reuters data. "Stocks kept by farmers are flat now," said a trader at a foreign firm in Ho Chi Minh City, adding that sales of new-crop beans were slow as exporters monitored prices and the weather.
Traders expect fresh beans to arrive in bulk in November as usual. Discounts of Vietnamese robusta grade 2 stood at $50-$60 a tonne to ICE January contract, unchanged so far this week, but widening from discounts of $30-$40 last Thursday. Differentials of beans grade 1, similar to the Sumatran coffee, switched to a discount of $5 a tonne. Last week, the grade was quoted at premiums of $10-$20/tonne. Indonesia's robusta grade 4, 80 defects stood at par or a premium of $7 a tonne to the November contract, up slightly from last Thursday, as stocks have started to decline at the end of the harvest season, exporters in Indonesia said. Vietnam and Indonesia supply a combined 28 percent of the world's total coffee.