Sales of coffee beans in Vietnam, the world's top robusta exporter, are expected to pick up from next week amid the harvest peak while an approaching typhoon could hurt bean quality and damage trees, traders said. They said light rains, the first in several months, were falling in the key coffee growing province of Daklak on Tuesday, while it was cloudy in the neighbouring province of Gia Lai.
The rain could be a prelude to typhoon Muifa, which killed at least 24 people as it crossed the Philippines. On Tuesday it was 430-km (267 miles) east of Vietnam's southern coast, moving south-west at about 10 km (6.2 miles) per hour.
Authorities in Vietnam's drought-stricken coastal provinces urged boats to return to shore or to take cover before Muifa's expected landfall on Thursday. The army's helicopters and high-speed boats have started searching for boats and directing fishermen from dangerous areas.
In the Central Highlands coffee belt 500 metres (1,640 feet) above the sea, coffee growers are not eager to see rain even though it could help bring water to reservoirs.
The drought has damaged part of the country's corn, rice and cotton areas in recent months.
"Raining is bad and no rains is bad, too," said a trader based in Buon Ma Thou, the capital city of Daklak.
Rains would not only disrupt the harvest and the drying process but also cause, unwanted flowering on the coffee trees where cherries had been picked, he said. The blossom period normally starts at the end of the harvest in late January and coincides with tree watering. Flowering will prompt smaller-sized cherries.
Farmers in the five central highland provinces have harvested about 25 percent of their coffee crop, traders said. The region produces around 80 percent of Vietnam's total coffee.
This week farmers started selling more thanks to higher global prices, but traders said the sale would really jump in December as farmers clear year-end debts and prepare for the lunar New Year festival in February 2005.
London's March contract closed $3 a tonne higher at $712 on Monday. Prices in Daklak track the rise, edging up to 8,620 dong (54.8 cent) per kg on Tuesday, from 8,570 dong (54.5 cents) on Monday and a range of 8,370-8,450 dong last week.
"Higher prices have stimulated farmers and we see them selling beans with more excitement," said a Buon Ma Thou resident. Export quotations for Vietnam robusta grade two, 5 percent black and broken firmed to $580 to $610 a tonne, free-on-board basis, from $560 last week.
Bids were $10 a tonne lower. "It is possible to buy fresh beans now but the stock is still small," said a trader. He estimated a local dealer could buy up to 10 tonnes a day from farmers, compared with the daily purchase of up to 50 tonnes at the same time last year.
"Farmers either do not have many beans to sell or want to hold back, waiting for prices to rise," he said.
Another trader in Ho Chi Minh City said foreign buyers would start trading more actively next month since they forecast prices to fall to below 8,000 dong per kg at the harvest peak. On Monday, Southeast Asian coffee growing nations discussed production, planting techniques and the sustainable development of the coffee industry, Doan Trieu Nhan, deputy head of the Vietnam Coffee and Cocoa Association, told Reuters.