Vietnam coffee-offers on par with London, buying weak

Vietnamese coffee exporters kept their quotations on par with London futures prices on Tuesday, while buyers were slow to make purchases quiet during the holidays, traders said on Tuesday. The 2012/2013 crop harvest has almost ended in Vietnam's Central Highlands coffee belt, while farmers have been selling less quickly than in previous years, leaving an supply of fresh beans, traders said.
"Farmers are selling steadily in recent days but much lower than in previous years," said a trader from Buon Ma Thuot city, the capital of Vietnam's top growing province of Daklak. Trading firms were not keen to buy, while exporters sought to sell at prices on par with London he said. Bids narrowed to $15 a tonne to the March contract, against discounts of $10-$30 a week ago.
The March robusta coffee contract ended up 0.69 percent at $1,907 a tonne on Monday. Vietnamese robusta beans rose to 38,100-38,300 dong ($1.83-$1.84) per kg on Tuesday in Daklak, from 36,800-37,700 dong a week ago. On Monday, the government estimated December coffee exports would rise 8.9 percent from the same month last year to 170,000 tonnes, or 2.83 million bags, above market expectations of 100,000-150,000 tonnes.
The December shipment, which is the record high for the month, brought exports in October-December, the first quarter of the 2012/2013 season, to 394,300 tonnes (6.6 million 60-kg bags), a surge of 52 percent from a year ago, General Statistics Office data showed. The three-month shipment included at least 150,000 tonnes of beans from the previous 2011/2012 crop year, meaning Vietnam has exported less than a fifth of its 2012/2013 crop output, which traders estimated would ease to 24 million bags.
The decline was expected as traders said trees needed to rest after producing a record output of up to 27.5 million bags in the 2011/2012 (October-September) crop year. Coffee farmers will begin watering trees for the next 2013/2013 crop cycle from early February. Early flowers in some areas after scattered, unseasonal rain in recent weeks may force growers to water trees earlier, traders said.
The next crop's production could face a water shortage because waters in lakes and streams in the Central Highlands appeared to be lower than last year, traders said. "Dryness could emerge and force farmers to water trees more, which will raise their production costs, while I don't believe it would cut output," the Buon Ma Thuot-based trader said.