Vietnam's coffee exports this month could fall to between 100,000-110,000 tonnes (1.67-1.83 million bags) from 150,000 tonnes shipped in May as stocks are thin, traders said on Tuesday. Lower exports from Vietnam, a sign of tightening robusta supply, could help to partly offset the impact on prices from news of a large crop in Brazil, which on Friday pulled arabica to the lowest price since July 2010.
"The stocks left over are thin. Trading is on a decline so the export volume for the month will drop," a trader at a foreign company in Ho Chi Minh City said. Vietnam, the world's second-largest producer after Brazil, in May exported 150,000 tonnes, or 2.5 million 60-kg bags, a surge of 52.8 percent from May 2011 and above market expectations. Vietnam coffee prices have hit multi-month highs amid tight stocks.
With London's markets closed on Monday and Tuesday, robusta prices in Vietnam have softened to 42,200-42,500 dong ($2.02-$2.03) per kg in Daklak, the country's largest producing province, from 43,200-45,000 dong a week ago. "The commodity is now in the hands of some rich families, and they are in no rush to sell," said another trader in Ho Chi Minh City, Vietnam's biggest coffee trading market.
Coffee farmers often sell most of their crop during or after the harvest to get cash to cover various expenses, but coffee prices being well above their production costs since 2010 have helped a some of the growers retain stocks for a longer period. Farmers who were still holding coffee said they could sell if domestic prices rise to 50,000 dong per kg. At the current level, prices are still below a range of 48,000-50,300 dong per kg seen in the first week of June 2011, based on Reuters data.
The 2011/2012 crop harvest ended in January and the next will not start until late October or November in the Central Highlands coffee belt. With market holidays in London, export offers of Vietnamese robusta stood at around $40 a tonne discount to September contract, compared with a range of $35-$50 a week ago.
The discounts placed Vietnamese beans at around $2,100 a tonne, free-on-board basis, from $2,178-$2,193 last Tuesday. "The export market is very slow this week, following little activity on domestic markets," a third coffee trader said. Vietnam could export 1.29 million tonnes, or 21.5 million bags, of coffee this year, the Agriculture Ministry said, slightly higher than its previous forecast of 1.25 million tonnes.
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