By Phuong Nguyen and Mas Alina Arifin
Domestic coffee prices in Vietnam edged higher on Thursday, tracking gains in global markets, while premiums for Indonesian beans were mixed at the start of the harvest.
Farmers in the Central Highlands, Vietnam's coffee belt, sold beans at 91,600 dong to 92,000 dong ($3.48 to $3.50), up from last week's 89,000 dong to 89,500 dong
Robusta coffee ICEEUR:RC2! for September delivery settled $113 higher, or 3%, at $3,771 a ton, on Wednesday.
"Some farmers have sold most of their stockpiles, tightening supplies in Vietnam, while coffee beans from Indonesia do not appear to be abundant either," said a trader in the coffee belt.
Traders said farmers were not positive about the outlook for the upcoming crop.
"This year's irregular rainfall and extreme heat have increased fungal diseases, raising concerns about production. On top of that, irrigation costs have been sky-high," a second trader said.
Traders offered 5% black and broken-grade 2 robusta at a discount of $200 to $250 per ton to the September LIFFE contract.
In Indonesia, Sumatra robusta coffee beans were offered at an $80 premium to the September contract this week a trader said, up from a $60 premium last week.
Another trader quoted a $40 premium to the July contract, compared with a $65 premium last week.
"Farmers have started harvesting coffee from their plantations, with peak harvesting expected in late July or early August," a farmer in Lampung said.
"Recent rainfall and favourable weather conditions are supporting coffee development, particularly for next year's crop," the farmer added.
($1 = 26,293.0000 dong)