Vietnam’s Coffee Belt Reports Weak Demand
March 27 - 2021Coffee Geography Magazine
Vietnam's coffee belt reported weak demand, while the Indonesian premiums narrowed as farmers are expected to sell more beans ahead of Ramadan, traders said on Thursday. Vietnam is the second largest producer in the world after Brazil, with Robusta coffee accounting to 97 per cent of Vietnam's total output.
Farmers
in the Central Highlands, Vietnam's coffee-growing capital, sold coffee at
32,800 dong-33,500 dong per kg($1.42-$1.45), up from last week's 32,100
dong-32,800 dong.
The weak demand is exacerbated by the Suez Canal incident which hinders Asian beans from reaching the E.U. market.
"Farmers
are holding back from selling coffee beans due to unattractive prices,"
said a trader based in the coffee belt.
Traders
in Vietnam offered 5% black and broken-grade 2 robusta at premiums of $55-$60
to the May contract, compared with last week's 50-$60 premiums.
In
Indonesia's Lampung province, robusta beans premiums narrowed this week,
traders in the region said, as they expected farmers to start selling their
bean stocks to cash in for Ramadan needs and ahead of the upcoming harvest.
One
trader offered $200-$220 premiums to the May contract this week, down from
$230-$240 premiums to the April contract last week.
Another
trader offered $230 premium to the May contract, down from $250 last week.
"The farmers will start selling a lot of the beans in April or during the Ramadan
month because there will be a lot of spendings for that month," one of the
traders said, adding the main harvest would start in May.
The
Islamic fasting month, Ramadan, will start around mid-April and Muslim
households in Indonesia typically increase their spending during the
festivities of the month and ahead of the holidays at the end of Ramadan.