Vietnamese coffee prices edged up this week, tracking a rebound in London robusta futures, while a fall in stocks has slowed trading on domestic and export markets, which could seize up completely in coming weeks, traders said on Tuesday. They said any further price gains could trigger sales, leading to a run-down in stocks in Vietnam, the world's second-largest producer after Brazil.
The country is ending the first three quarters of the 2010/2011 crop year with nearly 90 percent of output sold, and the next harvest will not peak until late November. The scant supply from Vietnam, coupled with a smaller crop in Indonesia, may push global robusta prices up, which would stimulate more sales from Vietnamese farmers and speculators, traders said.
"They are waiting for 'turning points' and if prices rise again they could sell more," a trader in Ho Chi Minh City said, noting trade had been slow due to thinning stocks and speculation about further gains in prices. Vietnam's coffee exports between October 2010 and this month rose 25 percent from a year ago to 19.47 million 60-kg bags, the government's General Statistics Office said on Monday, giving an average loading of 2.2 million bags per month.
Vietnam may have 2.5 million bags left from the latest harvest of 22 million bags as estimated by traders, based on Reuters calculations. With stocks now equivalent to around five weeks of loading, there would be no coffee left to ship from mid-August to October if the loading pace so far this year is maintained.
Last week an industry official said exporters had delayed loading part of contracts totalling around 100,000 tonnes since May because of thin stocks, and at least two traders have raised concern over possible defaults on shipments in coming weeks. PREMIUMS TO LONDON On Tuesday robusta beans were 4.5 percent higher than a week ago at between 49.9 million and 50.3 million dong ($2,428-$2,448) a tonne in the Central Highlands coffee belt, in line with the rebound in the London market on Monday.
Robusta grade 2, 5 percent black and broken stood at around $2,470 a tonne, free on board, up from $2,370 last Tuesday and a premium of $93 a tonne above London's September contract. Liffe September ended up $58 at $2,377 a tonne on Monday, underpinned by potential tightness in available supplies later this year, after prices dipped last week to the lowest level in almost five months.
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