Company News

Asia Coffee-Trade resumes in Vietnam after govt eases lockdown curbs

HANOI/BANDAR LAMPUNG, Indonesia, April 23 (Reuters) - Coffee trading in Vietnam resumed on a sluggish note on Thursday after the government eased lockdown restrictions, while stocks in Indonesia remained limited, traders said.

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee COFVN-DAK at 29,500 dong ($1.26) per kg, lower than the 31,200-31,500 dong range before the lockdown.

“Although the government has eased restrictions, trading activities remain sluggish on very low prices,” said a trader based in the Central Highlands.

“Farmers are not willing to sell beans at low prices while demands from exporters are not as high as before the outbreak,” he added.

July robusta coffee settled up $7, or 0.71%, at $1,128 per tonne on Wednesday.

Traders said coffee farmers were struggling to secure sufficient amount of water for their trees as it had not rained since December.

“If this situation persists, the lack of water may result in a poor harvest later this year with smaller-sized beans,” another trader based in the region said.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at $150 premium per tonne to the July contract on Thursday. The premiums were $120-$150 per tonne to the May contract three weeks ago, before the lockdown was imposed.

In Indonesia’s Lampung province, Sumatran robusta beans were offered with $300-$310 premium to July contracts, traders said. That compared to around $250 premium last week.

The premiums were increased to compensate for falling benchmark London price, one of the traders said.

Meanwhile, new supply has started to trickle in as some areas began their harvest, but supply of beans are still limited.

“Supply is still very little and everybody competes over them,” said one trader, adding that local buyers were dominating trade this week.

$1 = 23,495 dong Reporting by Phuong Nguyen in Hanoi and Mas Alina Arifin in Bandar Lampung; Editing by Ramakrishnan M.