Vietnamese coffee farmers may sell their remaining stock for the last time early next month to buy fertiliser to help ensure a good harvest, traders said. Vietnam's coffee market has been slow in the past month as stocks dwindled and traders hoped they could get the last beans in early September, when farmers prepare their children for the start of the school term.
"They may sell one time more next month and feed trees with fertiliser before the harvest starts in October," said a trader in Ho Chi Minh City. Fertiliser is needed for the last time during the production cycle to improve nutrition to coffee trees at the end of the rainy season next month.
Traders said domestic prices of less than 35,000 dong ($2.12) per kg did not give farmers an incentive to sell, though many had parted with their beans in late June or early July when prices were around 37,000 dong per kg. On Tuesday, a kg of robusta beans edged up to 34,500-34,700 dong ($2.09-$2.1) in Daklak province, from 34,200 dong on Monday but they were still lower than 36,000 dong per kg a week ago.
Daklak in the Central Highlands coffee belt produces one- third of Vietnam's total output. Fresh quotations for outright contracts were absent this week as exporters could not buy from domestic markets, while indicative discounts to London narrowed to $140-$150 a tonne, from $150 two weeks ago.
The discount meant Vietnamese robusta grade 2 stood at $2,110-$2,120 per tonne, free-on-board, down from $2,240 a tonne last Tuesday. The world's largest robusta producer could harvest an output at least on par with the previous season, even though industry officials have said rains and pests such as cicada have affected production.
"Some areas in Daklak reported cherries dropping," a trader said. While the loss of green cherries dropping before the harvest happens every year, the damage this year may make up 10 percent of an estimated output of 1.3 million tonnes, he said.
The problem of cherries falling prior to the harvest is partly due to an imbalance in the use of fertiliser as farmers cannot afford to buy all the types necessary for trees and use only urea instead of a combination of urea, phosphate and potassium fertiliser, industry officials said.
The Vietnam Coffee Association, the industry watchdog, has forecast the next harvest to yield about 15 million bags, lower than industry estimates of about 21.5 million bags. Vietnam's coffee stock available for sales was estimated at less than 100,000 tonnes at present, which would be sold between now and the first half of October before fresh beans become available, traders said. The harvesting lasts between late October and January.
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