Vietnamese coffee prices rose to a near 11-month high on Tuesday, tracking gains in global robusta futures, while exports were sluggish due to thin demand in external markets, traders said. Sales in the world's largest robusta producing nation have quickened since the weekend, as global coffee prices advanced on concerns over the quality of the new crop in Brazil and also on adverse weather.
"Sale contracts have been fixed strongly," said Phan Hung Anh, deputy director of export firm Anh Minh in the central highland province of Daklak. Apart from firmer futures, there were no production or weather factors which influenced selling, he added.
The ICE September contract closed 1.3 percent higher at $1,768 per tonne on Monday, the highest close since July 1, 2015, underpinned by a poor harvest in top producer Brazil.
On Tuesday, prices of Vietnamese robusta beans rose to 37.7 million-38.0 million dong ($1,690-$1.704) per tonne in the Central Highlands coffee belt, in line with the gains in futures, from 36.0-36.3 million dong a week ago. At 38.0 million dong, the price was the highest since Aug. 19, 2015, according to Thomson Reuters data. It is also a key level at which farmers had expected to increase selling, traders said.
While the ICE September was headed towards a key psychological level of $1,800 a tonne, strong selling to cash in on high prices could put a brake on the London price, independent analyst Nguyen Quang Binh said in a report out on Tuesday. The September contract has risen 11.3 percent so far in 2016, due in part to stronger demand and concerns over dry weather in Vietnam, Brazil and Indonesia, the world's biggest robusta producers.
Global consumption in the 2016/2017 season is forecast to rise by 1.1 percent to a record high of 150.8 million 60-kg bags, the US Department of Agriculture said last month. Premiums for Vietnamese robusta grade 2, 5 percent black and broken narrowed this week to $10-$15 a tonne to the September contract from $40-$50 last Tuesday.
Bids were at par with London, but buying demand was weak as many roasters had sufficient stocks, said a trader in Ho Chi Minh City. Vietnam's coffee exports reached an estimated 1.32 million tonnes in the first nine months of the 2015/2016 crop year ending September, up 32 percent from a year earlier, based on government data.
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