Vietnam's Domestic Coffee Prices Rebound Amid Global Factors While Robusta Supply Shortage Emerges

According to Reuters, domestic coffee prices in Vietnam rose slightly on Thursday (February 25th) on the back of firmer global prices and limited supply. Local farmers are reluctant to sell, feeding expectations of further gains in the Robusta market.

Farmers in Vietnam's main growing region, the Central Highlands, sold coffee at 32,300 Vietnamese dong ($1.40) per kilogram, above the pre-Lunar New Year range of 31,200 to 31,700 Vietnamese dong ($1.35 to $1.39) per kilogram.

Data from local coffee traders' associations shows Robusta reached $1,463 per ton on Wednesday, the highest level in a year. As one trader put it: "With global coffee prices soaring, Vietnamese prices will keep rising slightly this week. Farmers no longer face the pressure of selling beans cheaply to cash in for the New Year, and they now hope prices will rise further before selling, which leaves supply very tight." Local farmers have already sold 40%-50% of Vietnam's Robusta from the new 2020/21 crop season.

Vietnamese traders offered 5% black and broken grade 2 Robusta at a premium of $90 to $100 over the May futures contract, unchanged from the week before the holiday. Vietnam Customs data shows the country exported 160,615 tons of coffee in January, a 10.2% increase year on year.

According to a local trader, in Indonesia's Lampung province a trader quoted a premium of $220 over the April futures contract, down from $270 to $280 last week. He added: "Since the London benchmark rose, the premium has been adjusted downward. Even so, it is difficult to export because inventory is too low."

FrontStreet Coffee Recommendation

With Robusta supply tight and prices climbing, fans of bold, low-acid coffee can look to Indonesia. FrontStreet Indonesia Wet-Hulled Mandheling comes from the Toba Lake area of the Lintong region in Sumatra, where the local wet-hulled method, in which the parchment is removed while the bean is still half-dry, gives the coffee its typical herbal and spice notes. A medium-dark roast keeps it low in acidity and full in body, with caramel, dark chocolate, and toasted bread aromas and a long, sweet finish.

For the top tier of Indonesian coffee, FrontStreet PWN Golden Mandheling is the benchmark. Produced by the PWN company, which buys only specialty-grade Mandheling, it follows a strict sorting standard: beans of 18 screen size and above, with fewer than three defects per 300-gram green bean sample to meet the highest G1 grade, followed by three rounds of hand sorting. The result is uniform, plump, translucent beans with a clean cup and a rich, mellow body, showing sandalwood, herbal, spice, roasted hazelnut, caramel, and dark chocolate notes.