Sunday, 5 December 2021

Vietnam Coffee Trade Slows as Buyers Bet on Bigger Discounts


HANOI: Coffee trading is slowing in Vietnam, the top robusta producer, on expectations that a larger harvest and changes to the London futures contract next year will give buyers bigger discounts.

Roasters and traders are delaying purchases on bets that a bigger crop currently being gathered will push prices lower, according to traders attending the Asia International Coffee Conference in Ho Chi Minh City last week. At the same time, changes to ICE Futures Europe’s robusta contract next July are expected to widen the discount of Vietnamese beans versus futures.

“It makes sense for them to defer purchases and go as hand to mouth as possible, especially if there’s confidence there’s ample supply,” Judy Ganes-Chase, president of J. Ganes Consulting LLC, said in an interview last week.

Vietnam’s robusta crop will probably rise 16 percent to 28.8 million bags in the season that started in October as output rebounds after rains hurt last year’s harvest, Export Trading Group estimates. The recovery comes as more output in Brazil next year is expected to add to supplies and help switch the global market into a surplus, Eric Llull, a coffee research manager at the company in Geneva, Switzerland, said at the conference.

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