26-Mar-2013 12:45
- Premiums narrow to $20-$30/tonne, from $40/tonne last week
- More rain expected in the coffee region, pressuring prices
HANOI, March 26 (Reuters) – Vietnam’s coffee market has slowed this week and prices have come off a 1-1/2-year high hit earlier this month as buyers turned to a crop of fresh beans in rival robusta producer Indonesia, traders said on Tuesday.
Thin buying interest in Vietnam, the world’s largest robusta producer, coupled with rain in the Central Highlands coffee belt may push prices further down to compete with Indonesia, where the harvest has been peaking.
“Domestic prices remain high and farmers are not selling,” a Vietnamese trader based in Ho Chi Minh City said, noting that robusta prices have dropped after reaching 46,000 dong per kg, the highest level since September 2011. (Full Story)
That’s made it difficult for exporters because they cannot buy on the domestic markets, the trader added.
Robusta beans in Daklak fell to 43,400-44,700 dong ($2.07-$2.14) per kg on Tuesday, from 45,300-45,400 dong a week ago, following a drop in London’s robusta futures market.
Liffe’s robusta May contract LRCc2 closed down almost 1 percent at $2,118 a tonne on Monday. It has lost 4.4 percent since hitting a five-month high of $2,216 on March 13 after concerns over Vietnam’s dry weather eased. (Full Story)
Some exporters offered to sell Vietnamese beans at premiums of $20-$30 a tonne to the May contract, down from $40 a tonne above London last Tuesday. COFFEE/ASIA1
“Trading houses are not buying here,” a trader at a foreign firm in Ho Chi Minh City said.
Buyers have turned instead to beans from Indonesia, where the harvest in the main growing region of Lampung has been peaking since its start late last month, traders said.
Indonesia is the world’s second-largest robusta producer after Vietnam.
Firm demand for Indonesian robusta was seen in Europe’s cash coffee market last week as the country’s beans have become more competitive with rival Vietnam, traders said last Friday. (Full Story)
Vietnamese farmers were still holding back stocks, refusing to sell, disappointed that domestic prices have been falling since March 11, traders said.
“Rain will add to their (pricing) problem as more rain coming will cause prices to soften,” the first trader said.
While the dry weather has been at peak in the Central Highlands, unseasonable showers were reported in the region in the past two weeks, weather reports and traders said.
More showers were expected on Tuesday evening, the national weather centre said in a report.
($1=20,920 dong)
(Reporting by Hanoi Newsroom; Editing by Tom Hogue)
(( hanoi.newsroom@reuters.com)(+844 3825 9623))
