Vietnam coffee trees face drought, trade picks up in Indonesia

Coffee farmers in Vietnam are struggling to secure sufficient water for their trees during the country’s dry season, while trading has started to pick up in Indonesia amid a mini harvest.

The Vietnam Coffee and Cacao Association said earlier this week that low water levels and threat of a drought in the Central Highlands, the country’s main coffee growing region, would hurt this year’s output.

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“Water levels at reservoirs are so low and many farmers are unable to water their coffee farms,” a trader based in the Central Highlands province of Dak Lak said.

“Underground water level is also very low,” the trader said. “Farmers in the region have to drill wells deeper than 80 metres to find water.”

Another trader also based in Dak Lak said coffee trees there are blossoming and the lack of water may result in a poor harvest later this year.

“Low coffee prices have also discouraged many farmers from taking care of their trees,” the second trader said.

Farmers in the Central Highlands sold coffee at 33,700-34,000 dong ($1.45-$1.47) per kg COFVN-DAK on Thursday, down from a range of 34,000-34,300 dong last week.

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Traders in Vietnam offered 5 percent black and broken grade 2 robusta COFVN-G25-SAI at a $50-$60 per tonne discount to the May contract, compared with $20 last week.

In Indonesia, activity has started to pick up as buyers anticipate some supply from a mini harvest in the southern part of Indonesia’s Sumatra island.

Some farmers in West Lampung have started producing coffee cherries, but in small volumes, according to traders. Local buyers were dominating trade this week.

Indonesia’s premium for the grade 4 defect 80 robusta COFID-G4-USD was steady on last week at $70-$80 to the May contract on Wednesday, a trader in Lampung said.

Another trader in the province said premiums were $169-$170. Trades were closed on Thursday for a public holiday. ($1 = 23,197.0000 dong)

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