HANOI: Vietnam’s coffee exports were sluggish as high offer prices and thin demand dulled purchases by overseas buyers, traders said on Tuesday. The world’s biggest robusta producer is sitting on huge stocks before its next harvest due late October, putting pressure on Vietnamese exporters who would have to part with some of their stocks to make room for new beans.
The ICE November robusta contract was trading 1.34 percent higher at $1,734 a tonne at 1020 GMT on Tuesday after closing up 1.78 percent at $1,711 the previous day. In Vietnam, robusta beans edged up to 36,900-37,300 dong per kg ($1.69-$1.71), from 35,800-36,000 dong a week earlier, tracking gains in London’s futures market. The price of 37,300 dong is the highest since July 15, but is still down 5.8 percent so far in 2015, Reuters data showed.
Vietnamese robusta beans grade 2, 5 percent black and broken were offered unchanged at premiums of $50-$60 a tonne to the November ICE contract. Slow selling, coupled with hoarding in the domestic market since late February, has pushed some foreign buyers to purchase Indonesia robusta or Brazilian conilon, traders said.
Last week, traders forecast Vietnam’s August coffee exports at between 100,000 tonnes and 120,000 tonnes, against a government estimate of 115,000 tonnes for July. The forecast means the country’s coffee shipment in the first 11 months of the 2014/2015 season ending September would be down 20.7 percent from a year ago to at least 1.19 million tonnes (19.83 million 60-kg bags), the lowest in five years. Vietnamese exporters and speculators are expected to reduce inventory in October and November, making room to store fresh beans from the next harvest, which is due to peak from late November, traders said.
The inventory is estimated at around 300,000 tonnes, or 22.5 percent of the 2014/2015 harvest, the Vietnam Coffee and Cocoa Association, or Vicofa, said. Vietnam is forecast to produce 28.8 million bags of coffee in the 2015/2016 crop season, compared with the London-based ICO’s estimate of 27.5 million bags for 2014/2015, according to a Reuters poll in July.
