Vietnam coffee trade to pick up next month

Tuesday, 25 September 2012 13:30

Posted by Imaduddin

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HANOI: Coffee trading is expected to pick up next month in Vietnam, the world's biggest exporter of robustas, where an accelerating harvest will help soften prices, traders said on Tuesday.

The Southeast Asian nation, which ranks second after Brazil in terms of coffee production, ends its 2011/2012 crop year this week, with output hitting a record 1.6 million tonnes.

The 2012/2013 season begins on Oct. 1, while farmers in the Central Highlands coffee belt have started an early harvest and will accelerate cherry picking from mid-October, making fresh beans available for export from late next month.

Output is expected to ease by 7 to 10 percent from the record picked in the season to September 2012, traders said.

Heavy rains which have been falling in Daklak, Vietnam's top growing province, in the past week, mostly in the late afternoon hours, did not affect the early harvest, a provincial official said by telephone.

"We are still expecting rains from storms and typhoons next month before the rainy season arrives," she said from Buon Ma Thuot, Daklak's capital.

The rainy season often ends in October in the region, giving way for coffee growers to dry cherries properly. Last year rain disrupted the harvest in October, hit quality and so reduced the monthly export volume.

Buyers were absent from the export market, keeping trading dull in recent days, traders said.

"Buyers have not made any deals yet, while there are some offers of new-crop beans," a trader in Ho Chi Minh City said.

"They have been waiting for prices to soften while now they still fear risks with discounts."

Another trader said plentiful stocks in trading houses and foreign roasters' warehouses helped damp trade before the new harvest picks up pace.

He said supplies next month would not be a problem, given between 100,000 tonnes and 150,000 tonnes were still available in stock held by farmers and exporters.

A group of Vietnam's top coffee exporters has recommended beans from the 2012/13 crop be priced at a discount of $30 to London futures and has asked the government to allow them to stockpile 300,000 tonnes to support prices.

On Tuesday discounts to London's January contract stood at $50 a tonne for loading in December, while beans for nearby shipment were at discounts of $20-$30 a tonne to the November contract, unchanged from last week.

In Daklak robusta rose to 41,600 to 42,200 dong ($1.99 to $2.02) per kg this week from 41,500 to 42,100 dong last Tuesday, tracking a gain in London's November contract, which inched up $1 to settle at $2,084 a tonne on Monday.

The discounts placed Vietnam's robusta grade two, 5 percent black and broken at $2,052 to $2,064 a tonne, free-on-board Saigon Port, from $2,014 to $2,051 a week ago.