Coffee prices in Asia fell in the week to Friday, weighed down by losses in London futures, which again slowed farmers’ sales in Vietnam, traders said.
The Euronext.liffe July robusta contract settled at US$1,488 a metric tonne Thursday, down from US$1,558/tonne a week ago.
Cash discounts in Vietnam, the world’s largest robusta exporter, were little changed at US$100/tonne in shrinking trade, compared with a week ago.
When coffee was above dong 25,000 per kilogram earlier this week, farmers accelerated selling, but with the fall in London futures prices now, the market has turned quiet again, said an official at an international trading house in Vietnam.
“My feeling is that demand is lower than people thought, based on the current market conditions, and I’m quite bearish on London futures.”
With unseasonal rains in December impacting bean quality, resulting in more black beans in Vietnam than usual, buyers are turning to Indonesia, where they can get better prices, traders said.
“It’s very quiet in Vietnam (but) we’ve received quite a lot inquiries recently, as the new harvest is coming (soon),” said a trader in Indonesia.
In India, coffee prices were higher than two weeks ago, holidays kept trading activity sluggish.
Arabica plantation grade A prices were quoted higher around US$3,900/tonne, while robusta cherry AB rose to around US$1,670/tonne.
“We didn’t get many inquiries, and it’s not only us…other traders are also saying that the demand falls into the lower side of the expectation,” said a trader at Bangalore.
India’s robusta production is 10-15% lower than last year’s, but “we don’t feel a shortage in the market, so prices are likely to soften.”
The International Coffee Organisation Wednesday revised 2008-09 world coffee production forecast down slightly to 127 million 60-kilogram bags.
“As yet there is no indication of any significant impact of the world economic crisis on consumption,” it said in a report. “However, changes in the behavior of consumers, particularly in the emerging markets of eastern Europe, are likely.”