HANOI: Vietnam’s coffee prices weakened in line with global futures markets, prompting some Vietnamese sellers to hold back their stocks until the next season and wait for higher prices, while buying demand has been thin. The 2015/2016 coffee crop will begin in October in Vietnam, the world’s top robusta producer, with the harvest peaking in the Central Highlands coffee belt from late November.
The ICE November robusta contract ended down 0.64 percent at $1,715 a tonne on Monday, although analysts polled by Reuters say the contract should finish the year higher at around $1,815 a tonne. Robusta in Daklak, Vietnam’s top growing province, eased to 36,900-37,300 dong ($1.67-$1.69) per kg on Tuesday, down from 37,200-37,500 dong the previous day but still on par with prices of a week ago.
“Farmers are not selling, sticking to the idea that they will sell only when prices rise above 38,000 dong,” said a trader at a major Vietnamese export firm in Buon Ma Thuot, the capital of Daklak. Given few transactions, Vietnamese robusta beans grade 2, 5 percent black and broken stood at premiums of $50-$70 a tonne to the November contract, against premiums of $50-$60 last week. Vietnam’s central bank on August 12 doubled the dollar/dong trading band on the interbank market to 2 percent of the official rate set daily, and the dong dipped nearly 1 percent against the dollar during the day. Vietnamese coffee prices have yet to weaken accordingly. Prices in Vietnam closely track London robusta futures.
Vietnam exported 107,140 tonnes (1.78 million 60-kg bags) of coffee in July, 2.8 percent up from the previous month, customs said on Friday, in line with expectations. July brought to 18 million bags the total volume exported in the first 10 months of the 2014/2015 crop, down 23.4 percent from the same period a year ago, based on government data.
With at least 1.67 million bags expected to be loaded this month and a crop output of 27.2 million bags based on a Reuters poll, Vietnam still has around 7 million bags for loading in September and onwards. The Vietnam Coffee and Cocoa Association has estimated the current stock at 300,000 tonnes, or 5 million bags.
