Vietnam’s coffee market picked up as global prices supported trade and farmers released beans ahead of a long holiday, while the Indonesian market remained slow, traders said on Thursday.
Vietnamese farmers in coffee-growing Daklak province quoted coffee beans at 37,100-37,500 dong ($1.65) per kg, slightly higher than last week’s 37,000-37,100 dong per kg, tracking London’s rises, traders said.
The London ICE March futures contract jumped to as high as $1,771 a tonne on Wednesday, the highest intra-day level seen since November 30, as roasters bought before Vietnamese producer selling slows for the Tet festival, dealers said.
Traders said the pick-up in local prices had encouraged farmers to cash out ahead of Tet, Vietnam’s lunar new year and its biggest holiday. It falls this year in mid-February, but the price is already attractive enough for a big release.
The 5-percent black and broken grade 2 robusta was traded around a discount of $50 per tonne to the ICE March futures contract, compared with a discount of $30-$45 per tonne a week earlier, traders said.
More contracts were secured this week due to increasing supply in the market and as demand picked up, although only at a modest pace, traders said, noting there was a gap in offers between most importers and exporters.
Vietnamese farmers are expected to sell beans actively up until Feb. 10 before shutting shop for Tet. They will return to trading at the beginning of March, traders said.
In Indonesia, the grade 4 defect 80 robusta traded at a $160 premium to the London March contract this week, unchanged for the past month amid depleting stock, a trader in Lampung said.
The trader said there were some small spot transactions this week. The market is expected to remain quiet until a mini- harvest in March and April.