Vietnam's coffee harvest has picked up pace and domestic sales have quickened with the arrival of fresh beans and higher prices, traders said on Tuesday. The world's largest robusta producer may have a smaller 2014/2015 crop due to lower yields and adverse weather after harvesting a record high 30 million bags in the previous season, traders and industry officials said.
Robusta futures prices, which softened this week under pressure from Vietnam's fresh supply, may rise if Vietnam's coffee outflows show signs of slowing next year. ICE January robusta ended down 0.4 percent at $2,065 a tonne on Monday. "There are some offers with discounts to the March contract at $100 a tonne, but the risk is too high so nobody is trading in it yet," a Vietnamese trader in Ho Chi Minh City said.
Discounts of Vietnamese robusta grade 2, 5 percent black and broken were offered mostly at $70-$85 a tonne to the January contract this week, versus $60-$80 a week ago. On Tuesday robusta rose to 40,700-41,000 dong ($1,90-$1.92) per kg from 39,900-40,700 dong early last week.
Daklak's output could fall 10 percent in 2014/2015 to nearly 420,000 tonnes due to lower yields from old trees and dry weather, provincial officials said on Tuesday. The forecast is in line with projections by Vietnam-based traders. Daklak picked 462,000 tonnes in 2013/2014, according to the province's agriculture department data, while traders estimated the province's output at 500,000 tonnes.
The coffee crop year lasts between October and September. The Central Highlands coffee belt has more than 100,000 hectares of old trees aged more than 20 years and their yields are dropping, the Vietnam Coffee and Cocoa Association (Vicofa) said. The 2014/2015 crop could fall 20-25 percent due mainly to dryness and lower yields, Vicofa said in a statement last week, without giving any figures. Forecasts by Vicofa are often regarded as underestimates in an attempt to boost prices. In October, Vietnam exported 95,800 tonnes (1.60 million 60-kg bags) of coffee, down 1.6 percent from the previous month, Vietnamese customs said last Friday.
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