Coffee farmers in Vietnam, the world’s largest producer of robusta beans, are holding back 25 to 30 percent of their crop, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd.
Vietnam will produce a record 22.1 million bags of coffee in the season ending Sept. 30, up from 20 million bags a year earlier, the Winterthur, Switzerland-based trader estimates. A bag of coffee weighs 60 kilograms (132 pounds). Robusta coffee prices have fallen 7.3 percent in London since reaching this year’s high of $2,174 a metric ton on Feb. 16.
Farmers “are still waiting for a higher price,” Volcafe said in a report e-mailed today. “The local activity is steady.”
Vietnamese coffee for May and June shipments was trading at a discount of $10 a ton to the price on NYSE Liffe in London, unchanged from last week, Volcafe data showed.
The volume of coffee being offered for nearby shipment is “good,” while offers for export for later dates are “next to nothing,” according to the report.
In Indonesia, the third-largest robusta grower, buyers are paying a premium of $100 a ton to the price on NYSE Liffe to obtain coffee for May and June shipments, Volcafe data show. The premium was unchanged from last week.
The local industry “remains the best buyer,” which is keeping the coffee at a premium, Volcafe said.
Robusta coffee was up 0.6 percent to $2,016 a ton by 4:23 p.m. on NYSE Liffe in London.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.