Asia Coffee-Vietnam's coffee belt braces for more rains, crops likely unhurt

Traders expected robusta prices this crop season to be much higher than in the previous one due to higher production cost and freight rates

  
Roasted coffee beans are seen on display at a Nestle Nespresso event in Paris, France, March 22, 2019. Image used for illustrative purposes.

Roasted coffee beans are seen on display at a Nestle Nespresso event in Paris, France, March 22, 2019. Image used for illustrative purposes.

REUTERS/Benoit Tessier

A part of Vietnam's Central Highlands, the country's coffee belt, is expected to face heavy rains resulting from tropical depressions but robusta cherries to be harvested from next month would not be hurt, traders said on Thursday.

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee at 40,500-42,500 dong($1.78-$1.87) per kg, higher than last week's 39,400-41,800 dong range.

"It's been rainy for the past week and more rains are expected to pour in the region but they will likely not affect the trees," said a trader based in the Central Highlands province of Dak Lak. "Cherries are growing well."

Traders expected robusta prices this crop season to be much higher than in the previous one due to higher production cost and freight rates.

"The production cost used to be 33,000 dong per kg but now it is around 40,000 dong due to a surge in fertilizer and labour prices," the trader said.

"Higher prices may lead to lower demand."

London ICE November LRCc2 futures settled down $73, or 3%, at $2,197 per tonne on Wednesday after having hit a 4-year high the day before.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at discounts of $250-$270 per tonne to the January contract, higher than the $220 discount a week ago.

In Indonesia's Lampung province, traders offered Sumatran robusta beans at discounts of $210-$220 to the November and December contracts and $250 discount to the January contract.

Last week, beans were offered at discounts ranging from $230-$250 to the January and February contracts.

Traders said Sumatran robusta bean prices this week were firmer as harvest had ended and many farmers were holding on to their remaining stocks.

($1 = 22,750 dong)

(Reporting by Mas Alina Arifin in Bandar Lampung; Editing by Anil D'Silva)


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