Lower futures prices have helped narrow coffee premiums in Vietnam, the world’s top robusta producer, and also caused prices to fall in Indonesia this week, traders said on Thursday. Arabica futures dropped for the second straight day on Wednesday on currency pressures and possible higher output from Brazil’s 2015/16 crop. The July robusta contract also closed down $25, or 1.4 percent, at $1,725 a tonne.
Premiums for Vietnamese robusta grade 2, 5 percent black and broken beans narrowed to $50-$60 a tonne to ICE September contract, from premiums of $50-$65 a tonne a week ago. Beans grade 1, screen 16 stood at premiums of $110-$120 a tonne, down from $110-$130 last Thursday.
“There is much coffee left in stock,” a trader in Ho Chi Minh City said, adding that sales have been slow mainly due to domestic price falls. Vietnam has exported nearly 755,000 tonnes between October 2014 and April 2015, based on government data, or nearly half the 2014/2015 output. Showers are more regular in parts of Vietnam’s Central Highlands coffee belt, where the rainy season started this week, traders said.