HANOI: Premiums of Vietnamese coffee to global robusta futures were unchanged as exporters rejected lower prices while slow sales in recent months have led to a decline in Vietnam’s coffee exports, traders said on Tuesday. Vietnam still has a large inventory and two months to clear it before the new crop arrives in October, while prices have been falling below the key 39,000-40,000 dong per kg level at which speculators are expected to sell. ICE September robustas closed down 1.4 percent at $1,627 a tonne on Monday.
Prices in Vietnam, the world’s top robusta producer, fell to 34,500-35,800 dong ($1.58-$1.64) per kg on Tuesday in the Central Highlands coffee belt, from 35,300-36,300 dong a week ago. On the other hand, falling futures prices kept Vietnamese coffee sales slow. Vietnamese robusta grade 2, 5 percent black and broken were offered almost unchanged at premiums of around $60 a tonne to both the September and the November contracts, while no bids were heard, traders said.
“Exporters wanted to cash on with the November contract, but buyers are not interested,” a trader at a European firm in Ho Chi Minh City said. Vietnam will export an estimated 115,000 tonnes (1.92 million 60-kg bags) of coffee in July, up 29.8 percent from a year ago, the government said. The July shipments bring coffee exports so far in Vietnam’s October 2014-September 2015 crop year to 1.09 million tonnes (18.24 million bags), down 22.7 percent from a year ago, the General Statistics Office said in a monthly report.
The country is estimated to have at least 9 million bags of coffee left in the country, much higher than the 6.5 million forecast to be exported by rival producer Indonesia. In the October 2015/September 2016 crop, which begins in just above two months, Vietnam has been forecast to produce 28.8 million bags of coffee, according to a Reuters poll, from 27.5 million bags estimated by the International Coffee Organisation for the 2014/2015 crop.
