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Asia Coffee-Vietnam's discounts expand, Indonesia's premiums tighten as London prices rise 

 Thursday, May 3,2018

AsemconnectVietnam - A jump in London's coffee prices extended discounts for Vietnam coffee amid weak demand and tightened Indonesia premiums during an ongoing mini harvest, traders said on Thursday.

Premiums for Indonesia's grade 4 defect 80 robusta  COFID-G4-USD retreated to $70-$80 a tonne to London's July contract  LRCN8 from a $110-$120 premium range a week earlier, traders said.

London's July contract jumped to as high as $1,845 a tonne on Tuesday, the highest intra-day level since Nov. 17, 2017, while the U.S. dollar also strengthened compared to the Indonesia rupiah  IDR=, Thomson Reuters data showed.

A few areas in Lampung province, a major robusta producing region in Sumatra island, are still supplying traders with beans from a mini harvest while demand is normal, an Indonesian-bsed trader said.
Indonesia's exports of Sumatran robusta beans from Lampung fell 65 percent in April on a year earlier to 4,011 tonnes, local government data showed on Wednesday, extending a decline in year-on-year exports to an eighth consecutive month.

The country's main harvest is expected around June or July.
Meanwhile in Vietnam, the worlds' second biggest coffee producer after Brazil, the discount for 5 percent black and broken grade 2 robusta  COFVN-G25-SAI grew to $100 a tonne from $60-$90 a week ago, traders said.

"Demand is slow as London's future market is inverted ... but the recent spike in the London price has prompted farmers to release more beans," said a Ho Chi Minh-city based trader.
Farmers in Daklak province, Vietnam's main coffee growing region, sold beans at 37,000-37,600 dong ($1.63-$1.65) per kg  COFVN-DAK, up from 36,500-36,800 dong last week, traders said.

The Vietnamese government estimated coffee exports reached 160,000 tonnes in April, bringing total exports of the beans to 689,000 tonnes in the first four months of 2018, or a 17.7 percent increase from a year ago.
Source: Reuters.com 

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