Markets in major Asian coffee producers were quiet as supply weakened in both Vietnam and Indonesia, while prices fell in the London futures market, traders said on Thursday. Trading in Indonesia was also slow due to the long weekend for Eid-ul-Azha celebrations on September 1.
Vietnamese exporters quoted the 5 percent black and broken grade 2 robusta variety at a discount of $30-$40 to the London ICE November contract, tightening from a $45-$50 discount last week. Farmers in Vietnam quoted prices at 45,000-45,700 dong ($1.98-$2.01) per kg, compared to 44,000-46,000 dong a week earlier, traders said, adding that farmers refused to release beans as London prices fell.
November robusta coffee settled down $30 on Wednesday, or 1.4 percent, at $2,075 per tonne. Trade and exports in Vietnam have been slow for several months as the nation is approaching the close of its 2016/2017 crop season, which ends in September. The government sees January-August coffee exports falling 19.4 percent annually to 1.026 million tonnes.
Traders said the upcoming crop looks healthy as sufficient rainfall supports trees growth. One Ho Chi Minh City-based trader expected output of the 2017/2018 crop to be 15 percent higher than the current crop. The US Department of Agriculture sees Vietnam's robusta output in the 2017/2018 crop at 27.5 million 60-kg bags, higher than an estimated 25.6 million bags for the 2016/2017 crop but lower than the 2015/2016 output of 27.83 million bags.
Meanwhile in Indonesia, coffee traders in the main robusta growing area of Lampung said grade 4 defect 80 robusta beans were traded between a range of $10 percent discount to on par with the ICE November contract. Beans inventories "nearly ran out" in Lampung for new contracts, one of the traders said, leading to thin trade, but shipments continue as exporters fulfil contracts made in previous months.