Rains affect beans drying process in Indonesia, tepid trade in Vietnam

Heavy rains during Indonesia's harvest season have disrupted the drying process for robust beans, while in Vietnam, trade activity has remained sluggish on limited supplies and subdued demand, traders said.

Big coffee harvest is underway in Liwa, West Lampung regency amid rainy weather and is expected to last until August, according to farmers and traders.

"Currently, heavy rains in the region are affecting coffee production. Rains not only cause the coffee beans to fall off, but also affect coffee drying process," said a coffee farmer based in the region.

"This year's output is estimated to be 10-20% lower than the previous one. The harvest is expected to continue until August," the farmer said.

A trader based in the region offered Sumatra beans at $150 premium to the August-September contract, down from $240-$250 premium last week as an adjustment to the London terminal.

Another trader also quoted $150 premium to the September contract, down from $200 premium last week.

In Vietnam, farmers in the Central Highlands, Vietnam's largest coffee-growing region, sold beans (COFVN-DAK) at 91,600-92,500 dong ($3.50-$3.54) per kg, down from last week's 92,300-92,600 dong.

"Trading activities are tepid now. Vietnamese farmers are not selling, many are turning to Indonesia for new beans amid ongoing harvest there," said a trader based in the coffee belt.

"Global prices recovered slightly this week following the trade agreement between the U.S. and Indonesia," the trader added.

Robusta coffee RC2! settled up $19, or 1%, at $3,427 a metric ton on Wednesday.

Traders offered 5% black and broken-grade 2 robusta (COFVN-G25-SAI) in the range of $130-$160 per ton premium to the September LIFFE contract.

($1 = 26,150.0000 dong)