Coffee sellers in Vietnam are holding back from entering deals in anticipation thinning stocks and a delayed harvest will boost prices, traders said on Tuesday.
They said the 2004/2005-crop harvest from the world's top robusta coffee exporter would start in November and peak in December, two weeks later than normal. "Vietnam is striving to create an advantage by improving its coffee quality by delaying the harvest to let cherries ripen fully," said a private dealer in Ho Chi Minh City.
"(The delay) is adjustable and surely is in growers' hands." Farmers have picked coffee cherries before they mature in the past three crop cycles to avoid potential theft from the trees.
If the harvest peaks in December, fresh beans would be available in the market later that month. Prices in the key Daklak growing province were between 8,600 dong and 8,700 dong (54.7 cent to 55.4 cent) per kg on Tuesday, down from 9,000 dong a week ago. Prices were around 10,000 dong per kg in late January at the end of the previous harvest.
The September robusta contract in London lost $6 on Monday to close at $661 a tonne.
"There have been no fresh deals and we only hear quotations for reference," said another trader at a foreign firm in Ho Chi Minh City. Indicative prices for robusta grade 2, 5-percent black and broken beans, fell to between $595 and $600 a tonne, FOB, from $600 to $605 a week ago. Traders said farmers expected prices to pick up by October as thinning stocks start to have an impact on the market.
Traders estimated around 200,000 tonnes of beans from the last harvest remained in the country. They said up to 150,000 tonnes of these beans could already be in the hands of foreign traders.
Exporters, local speculators or a few growers in the Central Highlands coffee belt keep the remaining volume. "Vietnam only has between 50,000 tonnes and 70,000 tonnes now available for sale, but the bean quality is not good as it is nearing the end of the crop year," said the second trader. He said buyers could switch to fresh beans in robusta rival Indonesia if they needed to cover short positions. Vietnam has estimated its coffee export between October 2003 and July 2004 rose 42 percent to 832,000 tonnes (13.9 million 60-kg bags) from the same yea period. Local consumption is around 50,000 tonnes a year.
Five traders surveyed by Reuters last month said 2004/2005-crop output would rise 14.4 percent from the previous season to an average 947,000 tonne (15.8 million 60-kg bags).
Forecasts ranged from 807,500 tonnes to around 1 million tonnes (13.5-16.7 million bags).