Coffee prices in Vietnam rose about 4 percent in the past week on a supply shortage at home and on concerns Hurricane Felix will take its toll on supplies from Central America.
In London, the benchmark November robusta coffee contract surged $57 to $1,775 a tonne, after hitting a two-week high of $1,777 as speculation swirled the hurricane could damage the arabica crop in Central America. "The news of Felix and the already limited supply of beans available for exports gave a big boost to local prices," a trader in Buon Ma Thou, the capital of Vietnam's top growing province of Daklak said.
He said his firm offered 26,000 dong, or $1.61, for a kg of robusta beans this week, 1,000 dong higher than last week, but could buy only several tonnes so far on Tuesday. Another trader said his firm offered export spot shipment at about $1,670 per tonne, on a free-on-board basis, or 4.4 percent above $1,600 a tonne last week.
Trading in Vietnamese coffee has been thin in the past month with stocks dwindling ahead of the next harvest, which is expected to peak at the end of November.
Traders believe unfavourable weather could reduce yields in some areas but overall they are not expecting big declines in yields from the world's largest robusta producer.
A Reuters poll estimated Vietnam's crop at 17.4 million bags, with a range of 15.5 million to 18.5 million bags, down from the bumper crop of 21 million bags in the last harvest that ended in January. But some Vietnamese trading firms and industry officials have more conservative forecasts. The Vietnam Coffee and Cocoa Association put the output at 15 million bags. But Vivek Vermeer, managing director of Olam International's Coffee Division, told Reuters last week he expected a harvest of 16-18 million bags.
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