ASIA COFFEE-Prices edge up in Vietnam, heavy rains may hurt Indonesian cherries

By Phuong Nguyen and Mas Alina Arifin

HANOI, Aug 21 (Reuters) - Coffee prices in Vietnam continued to inch up this week due to a scarcity of beans, while heavy rainfall in Indonesia likely hurt the growth of coffee cherries, traders said on Thursday.

Farmers in the Central Highlands, Vietnam's largest coffee-growing region, sold beans COFVN-DAK at 121,000-123,000 dong ($4.59-$4.66) per kg, up from last week's 107,000-110,000 dong, and the highest level since late-May.

"Domestic prices have increased significantly over the past week, although trade remains sluggish due to tight supply at the end of the harvest season," said a trader based in the coffee belt. He added that the current weather is favourable for new trees.

Robusta coffee LRCc2 settled up $133, or 3%, at $4,401 a metric ton as of Wednesday.

Traders offered 5% black and broken-grade 2 robusta COFVN-G25-SAI at a premium of $200-$300 per ton to the November LIFFE contract.

In Indonesia, Sumatra robusta coffee beans were offered at a $230 premium to the November contract, up from last week's $180 premium "maybe because farmers are holding off from selling", one trader said. Another trader quoted a $150 premium to the November contract, the same as last week.

The West Lampung region continues to see heavy rain, with coffee trees now in their initial flowering stage.

"Rainy weather significantly impacts the growth of coffee cherries, which are now the size of a crab's eye and are susceptible to fungal and pest damage," a farmer said.

($1 = 26,370.0000 dong)