Trade in Asian coffee markets was slow with the holiday mood in Indonesia dragging on amid a gubernatorial election earlier this week while stocks in Vietnam remained low, traders said on Thursday. In the Central Highlands, Vietnam's largest coffee growing region, beans were offered at 36,000-36,200 dong ($1.57-$1.58) per kilogram, up slightly from 35,500 dong a week ago, traders said.
Farmers were reluctant to sell beans at this price, which traders said was just enough to cover growers' production cost, while some farmers have already sold pepper, planted alongside coffee trees, to cover their needs. Demand is also weak, with Vietnam's 5 percent black and broken grade 2 robusta traded at a $60-$70 per tonne discount to the September contract London's September robusta coffee contract, traders said.
Global production of coffee is expected to exceed demand by 8 million 60-kg bags in 2018/19 the US Department of Agriculture (USDA) said earlier this month, with output from top growers Brazil and Vietnam set for record highs. Vietnam's main coffee growing province of Daklak has had continuous rains but traders said the precipitation level is favourable for the upcoming crop, whose harvest is due later this year.
In Indonesia, premiums for the grade 4 defect 80 robusta were unchanged from last week at $70 a tonne to the London's September contract, a trader in Bandar Lampung said. Trading is yet to return to normal after the long Eid Al-Fitr holiday, as also due to the gubernatorial elections in Lampung province, the trader said.