Benchmark Liffe May robusta coffee fell $16 or 0.78 percent to close at $2,024 per ton on Monday, pushing down robusta prices in Vietnam on Tuesday by 0.5 percent.
“Selling activity has slowed somewhat as prices are easing,” a trader in Ho Chi Minh City said.
Robusta eased to 39,500-39,700 dong ($1.90-$1.91) per kg in Daklak, the country’s top growing province, from 39,700-39,800 dong the previous day, below the benchmark level of 40,000 dong, above which farmers say they prefer to unload stocks.
Coffee prices in Vietnam closely track the London robusta futures market, but traders said exporters also watch New York arabica futures for direction.
Arabica coffee futures vaulted higher on Monday in a short-covering surge after flirting late last week with a 17-month low, although ample coverage by roasters and a large Brazilian coffee crop should keep values under the gun, brokers said.
“As New York edged up and London lost, sellers are waiting for the market open later today to decide how to move (this week),” said another trader at a foreign company in Ho Chi Minh City.
Discounts on Vietnamese grade 2, 5 percent black and broken to London’s May quoted by exporters widened to $30-$40 per ton this week from $20 a week ago, while bids stood at $40-$50. The prices meant $1,974-$1,994 per ton on a free-on-board basis from $1,966 last Tuesday.
“Buyers in general and roasters in particular are waiting for better prices because Vietnam still has high stock levels,” the first trader said.
He added that it was still difficult to buy from rival robusta producer Indonesia because of thin supplies there. New crop grade 4, 80 defect beans from Indonesia’s main growing island of Sumatra stood steady at a premium of $80 to London’s July contract last Friday, as the harvest in Sumatra has yet to peak.
The Vietnamese trader estimated the country still had at least 400,000 tons or 6.7 million 60-kg bags of coffee in stock available for export. Between October 2011 and last month, Vietnam, the world’s largest robusta producer, exported 572,700 tons or 9.55 million 60-kg bags, down 11.8 percent from a year earlier, according to government data.
Farmers and exporters could still hold about 11 million bags, factoring in crop output of 20.665 million bags estimated by traders in a Reuters poll in late January.