Monday 08 August 2022

Robusta coffee futures edge higher on news of rain in Vietnam’s key growing regions

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MILAN – Robusta coffee futures edged higher Thursday on news that rains in key growing areas and labour shortage are hampering harvesting operations in Vietnam. The main contract for January delivery closed $11 higher at $2,292, while the Ice Arabica was closed for Thanksgiving.

Fresh coffee beans from Vietnam’s 2021/22 harvest have yet to arrive because rains in key growing areas and a cherry picker shortage have disrupted bean processing, according to Reuters.

Local traders quoted by Reuters said demands for new beans were still high, but foreign exporters remained cautious due to supply tightness, container crunch and uncertain COVID-19 situation.

“Farmers have started to pick cherry but light rains in recent days have hindered the process,” said a trader based in the coffee belt.

“It’s still too early to tell if rains over the past month had harmed coffee beans but if it continues to rain in December, the quality will be hurt.”

Traders in Vietnam offered 5% black and broken grade 2 robusta at a discount of $300 per tonne to the March contract. The discount range was $280-$300 per tonne to the January contract last week, reports Reuters.

The most recent Gain Report from Usda revised the forecast for Vietnam’s coffee production in MY 2021/22 up to 31.1 million bags on improved weather conditions that supported yields. MY20/21 Vietnam coffee exports declined by 9 percent year-over-year to 24.77 million bags, according to Vietnam Customs.

Post also revised the MY21/22 coffee export forecast down to 25.8 million bags considering on-going logistical difficulties. Post estimates MY20/21 stock at 3.81 million bags, and forecasts that MY21/22 stock will rise to 6.58 million bags due to high carry-over and potential higher production.

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