Coffee trading in Vietnam, the world's biggest robusta producer and exporter, has been slow in the past week as buyers await lower prices as the harvest peaks next month, traders said on Tuesday.
They said the rainy season had ended in the Central Highlands coffee belt about a month than usual, which should give farmers the best conditions for drying.
Vietnam started harvesting this month, with new crop output expected by traders at around one million tonnes (16.7 million 60-kg bags) from an average estimate for the previous crop ending last month of 827,500 tonnes.
"Trees and their leaves look very good and it's been sunny there.
The sunnier the weather, the better the beans," said a Ho Chi Minh City-based trader who has just been to the key growing provinces of Daklak and Gina Lai for a crop survey.
He said workers in several farms in Daklak started picking cherries this week, which would make the beans from Vietnam's key growing province available for export in 10 to 15 days.
A gradual price recovery in recent years has triggered more investment even though the government has advised measures to reduce the growing areas or shift to other cash crops.
Export prices of Vietnamese robusta coffee had firmed to $800 in 2003 from $280 in November 2001.
Export prices for Vietnamese robusta grade two, five percent black and broken were quoted at $500 a tonne, free-on-board basis, for spot shipment, from $520 to $530 last week.
Traders said exporters were unwilling to sell given low stocks, while buyers were waiting for prices to ease in November and December.
"More quotations are now in the market using discounts to March contracts instead of January as exporters are afraid of lower prices next month and in December," said the Ho Chi Minh City-based trader.
Buyers quoted discounts of between $125 and $130 a tonne to March contracts, which closed on Monday in London at $609.
In Daklak prices firmed to 7,220 dong (45.9 cents) per kg on Tuesday, from 7,000 dong on Monday when London's benchmark November closed $1 up at $563 a tonne.
Last week local prices hovered around 7,500 dong per kg.
"Growers need this kind of dry weather," said another trader. State media on Tuesday quoted Ngo Chi Binh, deputy director of the state-run weather station for the Central Highlands, as saying rains had stopped for about a month, causing the water levels of lakes and reservoirs to be 30-40 percent lower than usual.
"The water shortage may be a problem when farmers start watering trees next year, so it may result in lower output for the next cropy," said the second trader.
After the harvest ends in January, growers normally feed trees with fertiliser and water them for the next three months.
Vietnam's coffee crop year lasts between October and September.