Indonesia coffeee discounts narrow post holiday; Vietnam quiet
Updated : 05/19/2017 14:13 GMT + 7
HANOI, May 18 - Coffee market in Vietnam was slow as bid-ask spreads were wide, resulting in several unmatched orders, while discounts in Indonesia narrowed after a holiday, traders said on Thursday.
Exporters quoted the 5 percent black and broken grade 2 robusta in Vietnam, the world's top robusta maker, at $20-$40 premium a tonne to London's ICE July contract , up from US$10-20 premiums last week, traders said.
"At this price, buyers and sellers' offers don't match ... so the market is very quiet," said Phan Hung Anh, deputy director of Anh Minh Co, a coffee-trading firm based in Dak Lak, Vietnam's largest coffee-growing province.
Importers, who seem to have enough beans in stock and have been bearing large financial costs due to recent price hikes in London market, are offering at a $10-$20 premium to the London price, Vietnamese traders said.
Local prices quoted by Vietnamese farmers on Thursday remained unchanged from last week at VND44,000($1.94) to VND44,500 ($1.96) per kilogram, which traders said, make export quotes higher than import offers.
"Farmers do not have much beans left, so they don't really care to lower their prices too much," said a Ho Chi Minh City-based trader.
In Indonesia, Vietnam's major coffee competitor, traders quoted the robusta grade 4 defect 80 at a $20 discount to the London's July contract, compared to $40-$80 two weeks earlier.
"Flow of coffee beans from farmers tends to be slow (in the past week) due to heavy rain fall...(so) drying process was delayed," said a trader.