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Asia Coffee-Domestic prices edge up in Vietnam as farmers hold off selling

HANOI/BANDAR LAMPUNG, Indonesia, May 21 (Reuters) - V ietnam’s domestic coffee prices inched higher on Thursday, compared with last week, as supplies tightened after farmers refrained from selling the bean on hopes that re-opening of economies could boost prices further.

Farmers in the Central Highlands, Vietnam's largest coffee-growing area, sold coffee COFVN-DAK at 31,800 dong ($1.37) per kg, higher than 30,000 dong last week.

“Domestic prices inched higher this week following a rebound in global prices,” a trader based in the coffee belt said.

“At the same time, tight supply pushed the prices higher as demand picked up following the reopening of some economies while farmers held onto beans in anticipation of higher prices,” he added.

July robusta coffee settled up $2, at $1,186 per tonne on Wednesday.

An official from Vietnam Coffee and Cocoa Association said the output of the 2020/21 season would drop by 15% against the current crop due to both drought and COVID-19 outbreak.

Traders in Vietnam offered 5% black and broken grade 2 robusta COFVN-G25-SAI at a $200 premium per tonne to the July contract, higher than $170-$180 premium range last week.

Traders in Indonesia’s Lampung province said Sumatran robusta was offered with a $290-$300 premium to July contract this week, compared with $260-$280 last week.

One of the traders said prices rose as many buyers this week competed over beans to fulfil contracts they already had with buyers abroad. ($1 = 23,270 dong) (Reporting by Phuong Nguyen in Hanoi and Mas Alina Arifin in Bandar Lampung; editing by Uttaresh.V)