Solid hikes in global futures coffee contracts have pulled up prices in Vietnam, the world's biggest robusta producer, to their highest since September 2011, traders said on Thursday. Traders said robusta coffee prices in Vietnam rose to between 47.2 million and 47.3 million dong ($2,092-$2,093) a tonne on Thursday, reflecting a record high in the March ICE futures contract in London.
"Farmers have released quite a lot of beans while exports orders are somewhat solid as buyers and sellers offers have met," said Phan Hung Anh, deputy director of Anh Minh Company in Daklak, the country's top coffee growing province. Vietnamese exporters quoted robusta grade 2, 5 percent black and broken at discounts of $60-$70 a tonne to the London contract, narrowing from a discount of $80-$85 a tonne earlier this week.
But some traders fear future domestic coffee could be too costly for exporters to buy from farmers if the London price continues to increase. "Exporters can only sell when we are able to buy beans from farmers," said another trader in Vietnam. "Importers have already asked for cheaper prices as higher London prices push up their interest loans costs as well."
Vietnam, the world's top robusta producer, exported 1.78 million tonnes (29.7 million 60-kg bags) of coffee in 2016, up 32.8 percent from a year earlier, Vietnam Customs said this week. In Indonesia, Vietnam's major rival, one trader quoted premiums of robusta grade 4, 80 defects at $20 to the March contract, slightly widening from a week earlier, while another trader priced a discount of $20 to the January contract.