Vietnamese Coffee Seen by Volcafe at a Discount as Futures Rally

Buyers of coffee from Vietnam, the biggest grower of the robusta variety used in instant drinks, are getting a discount for their beans after futures prices traded in London rallied, according to Volcafe Ltd.

Vietnamese beans for shipment in March and April are trading at a discount of $10 a metric ton to the price on the NYSE Liffe exchange, the Winterthur, Switzerland-based unit of commodities trader ED&F Man Holdings Ltd. said in a report e-mailed today. That compares with parity a week earlier.

In the export market, “good volume was traded at slightly lower differentials due to higher Liffe,” Volcafe said, referring to a premium paid or a discount obtained for physical coffee in relation to futures prices. Farmers are “selling only when needed and otherwise wait for higher prices.”

Robusta coffee futures rallied 4.2 percent last week and advanced 1.2 percent this week partly as Tet, the festival that celebrates the Lunar New Year, slowed sales. Prices also got a boost from the arabica variety, which is rallying on speculation dry weather will cut output in top grower Brazil.

In Indonesia, the third-biggest robusta grower, beans for shipment in March and April remained at a premium of $80 a ton to the exchange, unchanged from a week earlier, data from the trader showed. Bean deliveries were about 1,500 tons this week.

“Even with a higher Liffe, exporters are not very active,” Volcafe said. “Only those who carry stock from current crop are trying to sell their coffee,” it said, referring to the season that ends next month.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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