Coffee prices in Vietnam jumped nearly 4 percent on Tuesday, tracking a London robusta futures gain near a four-week high, while the early harvest has started but bean supply will not pick up until November, traders said. Rains from a tropical low pressure system since last week affected coastal provinces and delayed the maturing process of coffee cherries in the Central Highlands, but an agricultural official said the rains were good as they helped solidify beans.
Domestic prices rose 3.9 percent to 25,400-25,800 dong ($1.42-$1.45) per kg in Daklak, Vietnam's top growing province, on Tuesday from 24,500-24,800 dong last Friday. London November ended up $46 at $1,494 a tonne on Monday, near the four-week high of $1,497 earlier in the session. "Rising prices have tempted Vietnamese exporters to sell," a trader at a foreign firm in Ho Chi Minh City said.
Discounts for new-crop beans widened to $135 a tonne to London January this week, from $110-$120 a tonne late last week, including several deals involving an European trading house that bought at a discount of $125 per tonne, he said. Quotations for spot shipment stood at a discount of $40 per tonne to November contracts, pricing robusta grade 2, 5 percent black and broken at $1,450-$1,460 a tonne, on a free-on-board basis, up from $1,350-$1,360 a tonne last Tuesday.
Delivery of fresh beans could pick up from late November or December, when Vietnam's new harvest peaks. The coffee crop year lasts from October to September, starting with a four-month harvest. "Robusta cherries now tend to ripen later than before, probably due to climate change, and the harvest peaks in December and January in the past two years, instead of November," an executive with a major Daklak-based export firm told Reuters.
Most of cherries in Daklak's capital of Buon Ma Thuot remained green, with a tiny fraction turning red, and farmers said they could start their early harvest as soon as rains stopped. The rainy season often ends late next month in the Central Highlands, which produces 80 percent of Vietnam's total coffee.
Last Friday a senior Daklak agricultural official forecast the province's 2009/2010 crop could drop 5.9 percent from the previous harvest to 400,000 tonnes, or 6.7 million bags. In Lam Dong province, more farmers have started the early harvest, a process often involving selective picking of only red cherries. Major companies aim to harvest only when 90 percent or more of the cherries are ripe to ensure good quality. "Farmers cover the ground under a tree with a nylon sheet and I can see both green and red cherries," a Reuters witness said after travelling to Lam Dong, Vietnam's second-largest growing area, at the weekend.
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