Buyers of coffee from Vietnam, the world’s largest producer of the robusta variety, are getting a discount for the beans after futures rose yesterday, according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd.
Vietnamese beans for December and January shipment were at a discount of $30 a metric ton to the futures on the NYSE Liffe exchange in London, the Winterthur, Switzerland-based trader said in a report e-mailed today. Last week the beans were trading at the same price as in London. Robusta coffee gained as much as 2.1 percent yesterday on roaster demand after dropping to a nine-month low earlier in the week on bigger supplies.
“Differentials there have softened markedly, starting even when the market plummeted, and becoming ever softer with yesterday’s rally,” Volcafe said, commenting on Vietnam. Differentials refer to a discount or a premium paid to obtain physical coffee in relation to futures prices.
The weather in Vietnam has been “perfect” for harvest and post-harvest activities, the trader said. About 20 percent to 30 percent of the 2012-13 crop that started there last month has already been harvested, according to the report.
In Indonesia, the third-biggest grower of robusta coffee, buyers are paying a bigger premium for beans as the season that started there in April is coming to an end.
Indonesian beans for shipment in December and January are at a premium of $100 a ton to the exchange price, Volcafe said. That is up from $50 last week, data from the trader showed.
“Differentials are firming up to unattractive levels,” the trader said. “Vietnam is on hand to take the supply baton.”
The weather has been favorable for the development of the next Indonesian crop, it said. Stockpiles in Lampung are estimated at 120,000 tons.
Robusta coffee for January delivery rose 0.2 percent to $1,970 a ton by 12:57 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.