Vietnamese coffee sales weakened this week as price gains failed to meet expectations, but buyers still have the option to take robusta from Indonesia's ongoing harvest, traders said. Farmers and speculators in Vietnam, the world's top robusta producer, started building up stocks in late February on hopes of price gains, but futures prices have fallen since, leading to about a three-month hoarding. The hoarding began around 40,000 dong per kg.
ICE September robusta contract has lost a quarter to the life-low of $1,600 a tonne on May 26 from the year-high of $2,104 a tonne on February 16, 2015. It gained 0.06 percent to close at $1,734 a tonne on Monday. Robusta in Vietnam tracked the gain, edging up to 36,900-37,900 dong ($1.69-$1.74) per kg on Tuesday in Daklak, Vietnam's top growing province, from 36,900-37,600 dong a week ago.
"Vietnam has released a part of its stock, but the stockpile is still high," a trader in Daklak said. Slight sales began in late May as prices started recovering from as low as 36,000 dong per kg on May 30, but have slowed after failing to rise beyond 38,000 dong, traders said.
The next sale target is 39,000 dong, the trader from Daklak said. Hoarding has caused Vietnam's coffee exports to drop to their lowest level since 2010. May's shipment totalled 105,500 tonnes, up 1 percent from June, the Vietnam Customs said, in line with market expectations. The volume is down 23.3 percent from a year ago, bringing Vietnam's coffee exports in the first eight months of the 2014/2015 crop to 876,000 tonnes, down 27.7 percent and also the lowest in five years, government data show.
The crop year lasts between October and September. Premiums for Vietnamese robusta grade 2, 5 percent black and broken beans eased to $40-$60 a tonne to the September contract, from premiums of $50-$70 a tonne last Thursday.
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