Vietnam Coffee-Prices unchanged, beans in thin supply

HANOI: Coffee prices in Vietnam were unchanged on Tuesday from a week earlier, despite short supply in the market, as farmers refrained from selling stocks and exporters had thin stockpiling volumes, traders said.

Robusta beans were offered at 37 million dong ($1,767) a tonne on Tuesday in the top coffee-growing province of Daklak, versus a drop of $7 in May robusta coffee on Liffe, which closed at $1,857 a tonne.

Buyers offered premiums for robusta grade 2, 5 percent black and broken beans at up to $10 a tonne while several others sought to buy the beans at discounts of $10.

Robusta beans ranged from $1,847 to $1,867 a tonne for March delivery, against $1,793-$1,853 last week.

Importers sought to buy beans to make up for slow trade in the past few weeks, but exporters have thin stocks, which prompted them to be cautious about selling, traders said.

"High lending rates, staying at more than 20 percent, have prevented exporters from stockpiling beans as they had planned," said a trader in the Central Highlands province of Daklak.

"Exporters now buy beans with one hand and sell with the other hand. They dare not sign contracts before having the beans in stock as they used to," he said.

Vietnam's 16 largest exporters planned to buy 432,000 tonnes, or 7.2 million 60-kg bags, of the beans for stockpiles, state media reported last September, but so far they have just 50,000-100,000 tonnes, traders estimated.

After robusta prices in the Central Highlands fell to 37 million dong a tonne from around 40 million tonnes, farmers are now holding back the beans.

"They don't sell at below 37 million a tonne, so some exporters cannot purchase," another trader said.

Vietnamese farmers are holding back about 60 percent of the crop, which could be equivalent to between 650,000 and 700,000 tonnes, trading house SW Commodities said on Monday.

But Vietnam-based traders said the volume could be around 600,000 tonnes, or half of crop output.

"Farmers have the experience from the end of the previous crop, when they had few beans to sell, despite high prices," a trader in Ho Chi Minh City said.