Vietnamese coffee exporters lower prices to global levels

Vietnamese coffee exporters have cut prices to bring them on par with global levels as crop harvesting in the world's top robusta producer picked up pace and boosted supply, but sales were slow as buyers sought even lower prices, traders said on Tuesday. On the domestic markets, coffee prices edged higher, tracking a gain on London futures market overnight, but farmers' sales were still slow, traders said.
Liffe January robusta coffee futures finished up $55, or 3.6 percent, at $1,566 a tonne on Monday, boosted by concerns that rains will slow Vietnam's harvest. Prices hit more than a three-year low earlier in November. But the harvest resumed on Monday in the Central Highlands coffee belt after rains and deadly floods at the weekend, and cherry picking quickened on Tuesday thanks to a mostly dry weather, residents in the region and traders said. Scattered showers were expected on Tuesday in the five-province coffee region, the national weather centre said.
"The sky remains overcast today, that makes it difficult to dry cherries properly," said a trader in the key growing province of Daklak. He added that rain at the weekend may not affect yields of the current 2013/2014 crop, but could trigger early flowering on the trees where cherries have been harvested, raising the risk of lower yields in the 2014/2015 season. The gain in London lifted Daklak robusta prices to 31,500-32,000 dong ($1.49-$1.52) per kg on Tuesday, from around 31,000 dong on Monday and 30,300-30,600 dong a kg a week ago.
"Prices (in London) jumped quickly last night and that made farmers hesitant to sell," the trader said by telephone from Buon Ma Thuot, the capital of Daklak. The province produces a third of Vietnam's coffee output. If prices had increased around $5 per tonne, that would have prompted farmers to sell quicker, he added. Exporters were seeking to sell robusta grade 2 with 5 percent black and broken beans at a price on par with London's January contract, while buyers bid discounts of between $20-$30 a tonne to the contract.
The ask and bid prices put Vietnamese beans at between $1,536 and $1,566 a tonne, free-on-board Saigon Port, having recovered from $1,468 per tonne last Tuesday, the lowest since June 15, 2010. "Selling demand is low because buyers gave their bids too low," a trader at a foreign company in Ho Chi Minh City said.