March 5, 2020 / 7:43 AM / a month ago

Asia Coffee-Sales slow in Vietnam as growers withhold stock, Indonesia tepid

HANOI/BANDAR LAMPUNG, Indonesia, March 5 (Reuters) - Coffee sales in Vietnam have been slowing as growers withhold stock due to lower bean prices, which have fallen tracking London prices, while trading activity in Indonesia remained subdued on low supply, traders said on Thursday.

Coffee growers in Vietnam have sold 60%-70% of their beans harvested in the 2019-20 crop year that began on Oct. 1.

Farmers in the Central Highlands, Vietnam’s largest coffee-growing area, sold coffee COFVN-DAK at 31,500 dong ($1.38) per kg, compared with 32,000 dong last week.

Demand is still high but local coffee growers have frozen their sales because of low prices, a trader based in the region said.

“However, I think they will soon release more beans as new supplies from Brazil and Indonesia will start to come in from April,” he added. “Exporters may turn to those markets for beans to fulfil their signed contracts.”

Vietnam’s coffee exports in February are likely to have risen 31.1% from a year earlier to 150,000 tonnes, government data released on Saturday showed.

Traders forecast coffee shipments from Vietnam in March would pick up to around 160,000-170,000 tonnes.

May robusta coffee settled down $24, or 1.8%, at $1,307 per tonne on Wednesday.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at a premium of $145-$155 per tonne to the January contract on Thursday, widening from $130 last week.

Meanwhile, a trader in Indonesia’s Lampung province said Sumatran robusta beans were offered at $250-$270 premium to the July and December contracts, unchanged from last week.

“Prices are still so high and there are no new supply yet,” the trader said, adding trading activities remain limited.

Indonesia exported 12,149.9 tonnes of robusta coffee beans from Sumatra’s Lampung province in February, up 51% from the same month last year, local trade data showed on Monday. ($1 = 23,210 dong) (Reporting by Phuong Nguyen in Hanoi and Mas Alina Arifin in Bandar Lampung; Editing by Vinay Dwivedi)

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