HANOI: Vietnam’s domestic coffee prices advanced this week to their highest in almost two weeks, tracking gains in global prices, while the rainy season arriving on time has provided relief to farmers and enabled their replanting, traders said on Tuesday.
But the price gain in the world’s largest robusta producing nation has yet to match expectations by growers and domestic speculators, who have been hoarding coffee beans since prices were at around 40,000 dong (S$2.40) per kg in late February.
July robusta coffee settled up US$25 (S$33), or 1.4 per cent, at US$1,769 a tonne on Monday, pushing Vietnamese robusta to 38,000-38,100 dong per kg on Tuesday, the highest since May 6 in Daklak, the top growing province.
“The biggest headache this year is farmers’ hoarding,” a trader at a foreign firm in Ho Chi Minh City said, adding that speculators joining farmers has also contributed to slowing Vietnam’s coffee export.
Vietnam has exported nearly 755,000 tonnes of coffee between October 2014 and April 2015, the lowest since the 2009/2010 season, based on government data.
Exporters quoted premiums for robusta grade 2, 5 per cent black and broken at US$70-US$75 a tonne to the ICE July contract, widening from premiums of $60-$70/tonne last week.
They offered premiums at US$50-US$60 a tonne to the September contract. Bids by foreign buyers were at around US$50 a tonne to the July contract.
The rainy season has arrived in the Central Highlands coffee belt, which produces 80 per cent of Vietnam’s coffee, traders and a Daklak provincial official said. “It’s possible now to say that the rainy season has started,” said Nguyen Dai Nguong, director of Daklak’s weather station.
His comment followed a Monday report from the weather centre for Vietnam’s southern region which said the rainy season will this week return to the Central Highlands coffee belt.
“Farmers have replanted new coffee trees on some farms,”said a trader in Buon Ma Thuot, Daklak’s capital. Coffee replanting has been made possible after the central bank appointed state-owned Agribank to provide soft loans to farmers seeking to renovate their plantations between now and 2020.
