Vietnam coffee: Indonesia and London fall hit trade

Cheaper fresh beans in Indonesia and an overnight fall in London prices have steered away buyers from Vietnam, the world's top robusta exporter, traders said on Tuesday.
"Indonesian coffee is cheaper. It is about $30 to $50 less per tonne," said a trader based in Ho Chi Minh City. "They are harvesting and buyers are going there, not Vietnam."
Robusta harvests in Indonesia are expected to peak this month while fresh beans from Vietnam's upcoming 2004/2005 crop will not be available until October. In London, the most active contract, September lost $11 to close at $769 a tonne on Monday, following sales by speculators.
A second trader in Ho Chi Minh City said Vietnamese exporters found it difficult to seal a deal now because of thin supply. Local prices had not fallen as quickly as those had in the London robusta futures market, he said.
Vietnam's coffee prices closely track those in London. On Tuesday a kilogram of beans was offered for sale at 9,470 dong (60.3 cents) in the central highland province of Daklak, Vietnam's key growing area, down from 9,570 dong on Monday and from the range last week of 9,800 to 10,000 dong.
Foreign buyers said they were willing to buy Vietnamese coffee beans at a discount of $140 a tonne to September contracts, while exporters stuck firm to their offers with the differential of $105 to $110 a tonne.
The exporters' offers would put the robusta grade-two, five percent black and broken beans at $659 to $664 a tonne, FOB basis, down from $665 to $680 last week. Coffee experts and traders held an international conference on Monday in Hanoi to discuss implementation of the Common Code of the Coffee Community, aimed at ensuring the industry's sustainability.
The code's advocates, who include buyers and producers, say it would benefit farmers and provide reasonable earnings for all in the coffee sector and safeguard the environmental.
A draft will be submitted to an International Coffee Organisation meeting in September in London. Traders said the code, if approved by ICO, may have a long-term effect on the coffee industry but that no immediate impact was expected on trade.