ASIA COFFEE-Domestic prices edge lower in Vietnam, discounts narrow in Indonesia

By Phuong Nguyen and Mas Alina Arifin

HANOI, Feb 27 (Reuters) - Prices in Vietnam edged slightly lower this week on global cues and dull trading activities, while discounts in Indonesia narrowed, traders said on Thursday.

Farmers in the Central Highlands, Vietnam's largest coffee-growing region, sold beans COFVN-DAK at 130,500 dong ($5.11) per kg, down from last week's 132,200-133,500 dong.

LIFFE robusta coffee for May LRCc2 settled at $5,410 per metric ton as of Wednesday's close.

"London prices have fallen a lot since the beginning of this week," said a trader based in the coffee belt.

"Some exporters have already fulfilled their contracts so demand has become slightly softer. At the same time, farmers are still hoping that prices would further increase so they are not releasing beans in bulk."

Traders also offered 5% black and broken-grade 2 robusta COFVN-G25-SAI at a discount of $220-$280 to the May LIFFE contract.

In Indonesia, Sumatra robusta coffee beans were offered at a $70 discount this week to the April contract, compared with a $310 discount a week ago, a trader said.

To the May contract, the coffee beans were quoted at a $30 discount, compared with a $380-$400 discount last week, another trader said.

Both traders said the narrowed discount was to adjust to a drop in the London terminal.

($1 = 25,540.0000 dong)