Physical coffee trade in Vietnam, the world's top robusta exporter, has been slow as local sellers sought higher prices, traders said on Tuesday.
They said sales were expected to remain sluggish until the end of the 2003/2004 crop year on thinning stocks. The coffee crop year runs from October through September with a four-month harvest ending in late January.
"Transactions have been made but only by buyers who are really short," said a trader in the central highland province of Daklak, Vietnam's key growing area.
Traders said Vietnamese exporters were firm on their offers on Tuesday following gains overnight in London futures.
Benchmark May closed $4 up at $736 a tonne on Monday.
Vietnamese robusta five percent black and broken beans were put at $650-$655 a tonne on FOB basis, from $655-$660 a week ago, while buyers bid at $630, making it difficult to seal a deal.
Local prices in Daklak also tracked London's gain, edging to 9,450 dong (60 cents) per kg on Tuesday from 9,420 dong on Monday but still below last week's price of 9,700 dong.
Discounts to May contracts narrowed to $90 a tonne, from $100 in late February.
Traders estimated Vietnam's coffee shipment this month at 60,000-80,000 tonnes, against 80,000 tonnes last month.
"The export volume from April onwards would be falling until September," said another trader with a foreign firm in Ho Chi Minh City. "Stocks are thin while prices would not show improvements so we expect exports to be thin."
Traders estimated Vietnam still has 300,000-350,000 tonnes of beans available for sale, based on estimates of the average 2003/04 crop output of 750,000 tonnes and a carryover stock of 100,000 tonnes from the 2002/2003 crop.
While local consumption is five percent of the total output, exports in the October-February period rose 16.3 percent on a year earlier to 356,000 tonnes, government statistics show.
That left 450,000 tonnes in Vietnam, of which traders said up to 100,000 tonnes had been committed for delivery.
Traders said farmers no longer held large stocks of beans after finishing two phases of tree watering under the 2004/2005 crop cycle as they had sold the beans to local dealers for cash to buy petrol and hire labour for the watering process.
Growers normally water coffee trees three times in a crop cycle with each watering phase lasting four or five days. The last phase is expected to be completed either late this month or in April before the rainy season arrives in May.
Harvest of the 04/05 crop would provide fresh beans from late October at the earliest, traders said.
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