Vietnam, the world's second-largest coffee producer after Brazil, said on Tuesday it could export less than 650,000 tonnes of beans in the crop year ending in September if prices continue on their downward trend.
"The export volume could be 650,000 tonnes, but if prices head lower, we would not reach that level as farmers will retain beans," Van Thanh Huy, chairman of the Vietnam Coffee and Cocoa Association, told Reuters in a telephone interview.
London benchmark May robusta ended down $40 at $1,117 a tonne on Monday, having fallen to $1,114 a tonne the lowest since December 9 on speculative and fund selling. Prices in Vietnam, the world's top robusta producer, which closely track London, have eased to $1,080-$1,120 this week, the lowest since a range of $1,070-$1,090 a tonne in late December.
Last November, when the harvest was under way, Huy gave the export estimate for the current crop year which was already 16 to 22 percent below the 834,000 tonnes Vietnam sold in the October 2004-September 2005 season.
Harvesting ended in January and the coffee association, the country's industry body, kept unchanged its output figures widely regarded by traders as underestimates of 600,000 to 630,000 tonnes, compared with 804,000 tonnes (13.4 million 60-kg bags) in the previous crop year.
The association has said the drought in 2005 affected the coffee crop production in the Central Highlands, which produces 80 percent of Vietnam's coffee. "The harvest showed the output fell between 30-40 percent depending on the growing areas," Huy said, citing outcomes of a meeting by the association last week to review crop production and exports. He said the stocks carried over from the previous crop were estimated at between 120,000 and 150,000 tonnes, but foreign traders projected a range of 120,000 to 130,000 tonnes. Coffee is the world's second-most traded commodity after crude oil.
The coffee crop year lasts between October and September in Vietnam, which exports mostly robusta beans used widely in making instant coffee.
Vietnam exported an estimated 352,000 tonnes (5.87 million 60-kg bags) of coffee in the October-February period, the first five months of the current crop year, down 3.8 percent from a year earlier, government figures show.
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