December 27, 2018 / 7:04 AM / a month ago

Asia Coffee: Vietnam price rises on speculation; Indonesian trade remains muted

HANOI/BANDAR LAMPUNG (Reuters) - Domestic coffee prices rose further in Vietnam this week as traders hoarded supplies on expectations of higher prices, while trade in Indonesia remained muted.

A man checks roasted coffee beans at a factory in Hanoi, Vietnam November 22, 2016. REUTERS/Kham

Farmers in the Vietnam sold coffee at 33,800-34,000 dong ($1.46) per kg on Thursday, up from 32,600-33,500 dong a week earlier.

“Many domestic traders are increasing their purchases of the newly harvested beans, giving an upward push to domestic prices,” a trader based in Dak Lak province said.

The trader said the speculation followed clearer forecasts that output would fall by 15-20 percent during the 2018-19 crop year, mostly due to unfavourable weather conditions.

“Now that the harvest is about to end, a forecast about a drop in output appears to have become true,” said a second Dak Lak-based trader.

Vietnam is the world largest robusta producer. Farmers have picked nearly 85 percent of the 2018-19 harvest, which is expected to end mid-January.

Traders in Vietnam offered 5 percent black and broken grade 2 robusta at a $30-$50 per tonne discount to the March contract, compared with a $40-$50 discount last week.

In Indonesia, no trade was recorded this week due to a holiday.

Grade 4 defect 80 robusta was at a premium of $20-$30 to the March contract, unchanged from last week, a trader in the province of Lampung said.

Another trader in the province said Indonesian robusta was offered with $50 premium.

($1 = 23,220.0000 dong)

Reporting by Khanh Vu and Mas Alina Arifin; editing by Richard Pullin

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