Asia Coffee-Vietnam domestic prices hit one-year high on tight supplies

HANOI/BANDAR LAMPUNG, Indonesia, Aug 27 (Reuters) - V ietnam’s domestic coffee prices jumped to their highest level in a year on Thursday following a rise on the ICE and tight supplies at the end of the crop season, while prices in Indonesia extended their decline due to higher supply.

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee COFVN-DAK at 34,000 dong-34,500 dong ($1.47-$1.49) per kg, a level unseen since August last year, according to Refinitiv Eikon data.

November robusta coffee reached a six-month high on Wednesday, settling up $6, or 0.42%, at $1,427 per tonne.

“Inventories have run almost empty. Those who have to fulfil their signed contracts have to buy at those high prices,” said a trader based in the Central Highlands.

“It’s not possible to turn to Indonesia for beans now although supplies are rising there as beans from the ongoing harvest are only enough for Indonesian roasters and exporters.”

Vietnam’s next 2020/21 crop has been progressing well in the Central Highlands coffee belt.

“Rain has become relatively more regular, and cherries appear to be as big as those last year,” another trader at a foreign company said after conducting a survey in the region.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at a premium of $80 per tonne to the November contract, compared with the $80-90 range premiums last week.

In Indonesia’s Lampung province, prices of Sumatran robusta beans have extended their decline due to higher supply from ongoing harvest, traders said.

One trader quoted $140 premium to the November contract, down from $160 premium last week, while another quoted $200 premium for the November through March contracts, down from a $210 premium last week.

“Trade is pretty busy and supply is plentiful,” one of the traders said. “Harvest may last until the end of October.” ($1 = 23,174 dong) (Reporting by Phuong Nguyen in Hanoi and Mas Alina Arifin in Bandar Lampung; Editing by Amy Caren Daniel)