Vietnam's coffee stocks thin, hindered to have new deals

Thinning stocks in Vietnam, the world's top robusta coffee producer, have hindered new deals this week and stopped exporters purchasing from farmers for loading, which has in turn lifted export costs, traders said on Tuesday.
The thin stocks in Vietnam, the world's second-largest producer after Brazil, coupled with an ICO forecast of a fall in global production in the next 2011/2012 crop, could push prices up further in coming weeks.
Exporters are having to buy beans from several foreign trading firms that have stocks in their Vietnamese warehouses as farmers have stopped selling, traders said. Stocks have dwindled in Vietnam, now in the period between harvests, with one having ended last December and the next due to start from November in the Central Highlands coffee belt.
Traders said foreign firms sold robusta to exporters at premiums of $20-$30 a tonne to London's September contract, which ended up $38 at $2,471 a tonne on Monday.
Exporters then offered robusta grade 2, 5 percent black and broken at a premium of $50 a tonne to the September contract, against $20-$60 a tonne last Wednesday.
Their export quotations rose to $2,511-$2,521 a tonne this week, free on board, from $2,479-$2,489 last Tuesday. Vietnam's coffee exports in June could drop to between 65,000 tonnes and 80,000 tonnes, or 1.08 million to 1.33 million bags, from 110,000 tonnes in estimated shipments last month, traders have said.
In domestic markets, local speculators, including rich farmers who do not need to sell right away, offered beans at 51 million dong ($2,483) per tonne, well above the range of 49.3-50.2 million dong that exporters sought to buy at.
"It seems that stocks are now flat, or the volume left over is very insignificant," a trader said by telephone from Buon Ma Thuot, the capital of Daklak, Vietnam's top coffee province. Farmers held back their stocks after the Agriculture Ministry forecast domestic prices could rise to 55-60 million dong a tonne in the second half of 2011 due to tight global supplies.
Global coffee output in 2011/12 is expected to fall slightly to around 130 million 60-kg bags from 133 million in 2010/11, the International Coffee Organisation forecast on Monday.