Vietnamese robusta coffee prices jump 1.7 percent

Vietnamese robusta coffee prices jumped 1.7 percent in the past week to the highest level since August 2008, which could make it difficult for several exporters to secure beans locally, traders said on Monday.
Robusta beans rose to between 36 million dong and 36.2 million dong ($1,847-$1,857) a tonne on Monday, the highest since prices touched 36.5 million dong a tonne on August 11, 2008. The price advanced in Daklak, the country's top coffee growing province, following a rise in London's robusta futures market, where the March contract ended $39 higher at $1,986 per tonne last Friday.
Higher prices have encouraged farmers to sell actively on the domestic market to exporters since the weekend, but further rises could lead to a risk of delays from Vietnam, the world's largest robusta producer and exporter, traders said. Farmers may instead hold onto stocks hoping for further price rises.
The variety used mainly for making instant coffee stood at 35 million dong per tonne in Daklak last Monday and 35.2 million dong a month ago. Vietnamese prices closely track London moves. Exporters who had promised earlier to buy beans from growers at lower prices may fail to secure the commodity as farmers would seek to sell at the current price, a trader in Ho Chi Minh City said.
"Prices in London will probably rise more," adding to the potential problems with loading commitments by exporters, he said. But given that the harvest was now at its peak, exporters said they had stocks for loading. The current price was far above the cost of production so growers had been selling to take quick profit in the past few days, another Vietnamese trader at a foreign company said.
"Farmers are very happy and they are selling now," he said, adding that the harvest has been between 65-75 percent completed. Farmers in Daklak told Reuters last month that their production costs stood at 20 million dong a tonne. High prices at a time when farmers have completed 70 percent of the harvest run against a government forecast on December 8 that prices could fall to 30 million dong a tonne at the harvest's peak.
Traders said arabica prices hitting 13-year high last month helped raise the demand for robusta beans, despite the fact that global coffee output could rise 11 percent in the current crop to 133 million bags, based on the International Coffee Organisation data. Arabica prices in New York hit the 13-1/2-year high last Friday, with March contract soaring 8.75 cents or 4 percent to finish at $2.2530 per lb, the strongest settlement since June 1997.