Coffee sales in Vietnam are slowing due to low prices, while supply rose in Indonesia as produces from a mini harvest reached the market earlier than expected.
Farmers in Vietnam have sold 60-70 percent of their beans harvested in the 2018-19 crop year that began on Oct. 1.
“Sales are slowing as farmers are complaining that prices are too low now,” said a trader based in the Central Highlands, Vietnam’s largest coffee growing area.
Farmers in the Central Highlands sold coffee at 31,900 - 33,300 dong ($1.38-$1.44) per kg on Thursday, compared with 31,900-33,700 dong last week.
“They are refraining from selling further as current prices are only slightly above the production cost,” the trader added.
Another trader said low prices also discouraged farmers to water their coffee trees already suffering from a drought in the region.
“It’s still too early to say if the drought will hurt the output of the next crop year, because if it rains when the trees are blossoming after the drought, it will be perfect for the next crop year,” the second trader said.
Traders in Vietnam offered 5 percent black and broken grade 2 robusta at a $55-$60 per tonne discount to the May contract, compared with $50 last week.
In Indonesia, supplies from the mini harvest in the southern part of Sumatra came slightly ahead of expectation of around April.
A trader in the Lampung province in Sumatra said supplies this week rose 10-15 percent from last week.
Premium for the grade 4 defect 80 robusta was steady on last week at $70-$80 to the May contract on Thursday, the trader said.
May robusta coffee settled down $13, or 0.9 percent, at $1,495 per tonne on Wednesday, giving up some of the previous session’s gains.