HANOI: Between 35 and 40 percent of Vietnam's 2011/2012 coffee crop has been harvested in major growing areas but farmers are slowing down sales and waiting for prices to rise further, traders said on Tuesday, following gains in London robusta futures overnight.
"The harvest is progressing well with good quality of beans, but farmers are not rushing to sell dry beans, waiting for prices to grow further," said an exporter in Buon Ma Thuot, the capital of Daklak, Vietnam's largest coffee-growing province.
In 2010, farmers accelerated the harvest after some disruption by rain in the Central Highlands coffee belt to take advantage of good prices, and by Nov. 30 last year around half of the crop had been picked.
Output of the 2011/2012 crop could rise 13.5 percent from the previous season to 21 million bags, according to a Reuters poll.
That means Vietnamese growers may have already harvested up to 8 million bags, based on the median forecast.
It takes around 10 days to two weeks for the cherries to be dried, processed, bagged and delivered to Saigon Port, Vietnam's main facility for coffee export.
The slower harvest in Vietnam, the world's top robusta producer, could boost robusta prices as demand is good. The covering of short positions by funds was one factor behind a 5 percent price rise at one stage in London on Monday.
Optimism over euro zone talks to address its debt crisis sparked the short-covering surge and the March contract ended up 1.24 pct at $1,952 a tonne, although January failed to keep up, closing $13 off at $1,915.
VIETNAM PRICES RISE
Robusta prices in Vietnam rose 1.3 percent to 39.2-39.4 million dong ($1.87-$1.88) a tonne in Daklak on Tuesday from 38.8 million dong on Monday. Prices have gone up around 15 percent from the same time last year.
Traders said coffee farmers were waiting to see if prices would break above 40 million dong ($1,904) a tonne, a level last seen at the end of October.
"They are selling slowly. The ratio of coffee sold is low," another trader in Buon Ma Thuot said, referring to the volume sold on local markets as a proportion of cherries picked. He did not give any specific rate.
Exporters said they offered Vietnamese beans grade 2, 5 percent black and broken at either a discount of $10 a tonne to March contract to a level on par with the contract, cutting the gap from discounts of $20-$25 a tonne last Tuesday.
"Discounts are narrowing this year, perhaps due to a buying demand," the Daklak-based exporter said.
But a trader at a foreign firm in Ho Chi Minh City said exporters also offered a discount of $10 a tonne to London's January or on par with January price for loading in December.
"It depends on how short the buyer is to choose the price and take the beans," he said. "There is a good buying demand out there for Vietnamese coffee," he added.
Based on the discounts, robusta prices ranged widely between $1,905 and $1,952 a tonne, free-on-board basis, from $1,880-$1,885 a week ago.
Vietnam's coffee harvest normally ends in January. Last year farmers shortened the process and ended it in December because of the good selling prices.
Coffee exports this month fell 27 percent from a year ago to an estimated 50,000 tonnes, or around 833,000 bags, in line with market expectation, the government said.
Comments
Comments are closed for this article.