Vietnamese coffee exports down, discounts stable

Weak coffee prices discouraged Vietnamese farmers from selling in the past week and slowed exports which have been declining since rising to a 13-month high in February, traders and official data said. March's actual coffee export volumes dropped 7.3 percent from February to 187,000 tonnes, or 3.12 million bags, the Vietnam Customs office said on Tuesday.
But the monthly shipment volume is still 16.4 percent higher than the same month in 2011, when Vietnam shipped 160,600 tonnes, below a shipment of 215,500 tonnes in January. "Vietnamese exporters have not signed too many contracts with forward shipments this year to avoid price risks," a trader in Ho Chi Minh City said, adding that exporters have also avoided building high stocks due to limited funding.
Liffe July robusta coffee futures slipped $9 to close at $2,003 per tonne on Monday, sending prices in Vietnam down slightly to 39,400 dong ($1.89) per kg, from 39,400-39,500 dong a week ago. Prices have fallen from the year-high of 40,500 dong per kg hit in early March, based on Reuters data. Traders say farmers would be more willing to unload stocks if prices rose to at least 40,000 dong per kg.
"Farmers are not selling now, which will hurt not only them, but also exporters, as the harvest in Indonesia is going to peak from June and buyers could go there instead of buying from Vietnam," an exporter in Ho Chi Minh City said. Exporters quoted discounts to London's July contract at $30-$40 a tonne, unchanged from last Tuesday, while bids by foreign buyers were at $50, putting robusta grade 2, 5 percent black and broken at $1,953-$1,973 a tonne, free-on-board basis.
Transactions were feasible with a discount of $30 a tonne, a trader said. Vietnam is forecast to export 984,400 tonnes of coffee in the calendar year 2012 due to low output, down 18.3 percent from a prior projection of 1.205 million tonnes, the Agriculture Ministry has said. All government data in Vietnam are based on the calendar year ending December, while the country's coffee crop year lasts between October and September. Coffee exports between January and March fell 12.8 percent from the same period last year to 500,500 tonnes, the Finance Ministry-run customs department said in its monthly report.