By Khanh Vu
HANOI (Reuters) - Domestic coffee prices in Vietnam fell sharply on Thursday from Wednesday, halting the strong recovery from a six-year low seen in early May.
Farmers in the Central Highlands, Vietnam's largest coffee growing area, sold coffee at 33,000 dong ($1.41) per kg on Thursday, down 3% from Wednesday but higher than last week's prices of 32,000-32,700 dong.
"The price fall after a sharp decline in global prices is seen as a necessary technical correction, but I don't think prices can fall much further as domestic supplies are running low," a trader based in Dak Lak province said.
The trader added farmers have sold more than 80% of their 2018/19 harvest. The 2019/20 harvest won't begin until October.
"It's still too early to forecast the output of the coming harvest, but the weather conditions are good for the coffee trees, which are now bearing lots of young beans," another trader based in the region said.
July robusta coffee settled down $71, or 4.8%, at $1,413 per tonne on Wednesday, the contract's worst daily performance since September, pressured by arabica's fall.
Traders in Vietnam offered 5% black and broken grade 2 robusta at a $100 per tonne premium to the September contract, compared with a $80-$120 premium a week ago.
Meanwhile, trade in Indonesia is quiet this week due to the Eid Al Fitr holidays.
($1 = 23,390 dong)
(Reporting by Khanh Vu in Hanoi and Mas Alina Arifin in Lampung; editing by Uttaresh.V)