The coffee trade in Vietnam was hectic over the past week as domestic prices hit a year high on the back of a rally in London, but traders are facing rapidly dwindling supplies.
Traders said on Thursday that most growers have been unloading their stocks to take advantage of the lofty prices in Vietnam, the world's second largest coffee producer after Brazil. "Prices this high don't happen everyday so whoever still has beans will sell for profit," said a trader in Buon Ma Thou, the capital of the top coffee-growing province of Daklak.
He said his firm could buy about 200 to 300 tonnes a day versus 20 to 30 a tonne that was the daily average in June. Traders in Buon Ma Thou said local firms on Tuesday offered up to 18,950 dong ($1.19) per kg to buy beans from growers, up from 17,600 dong a week ago.
The price also surpasses the previous year-high of 18,600 dong, set in the first week of February.
London's benchmark September contract rose 2.4 percent on Monday to close at $1,288 a tonne, the highest level since the second-month contract touched $1,312 on February 3.
"Prices are great but there is not much coffee left right now as people have sold most of the beans they have," said another trader in Ho Chi Minh City. Stocks have been dwindling since Vietnam's coffee harvest ended in January.
The next harvest will not start until mid-October. Traders in Buon Ma Thou estimated there are only 40,000 to 50,000 tonnes of coffee beans available for export. "We expect price to hit 19,000 dong if supply is this tight," said the trader in Buon Ma Thou.
Last week government statistics showed coffee exports in June totalled 80,000 tonnes, bringing January to June shipments to 525,000 tonnes, up from 495,000 tonnes a year ago.
Growers in the Central Highlands coffee belt, who produce 80 percent of Vietnam's output, have said the harvest of a new crop in October would be a bumper one, given good water supply and the yield rise in the tree's growth cycle after a loss this season.
In June, the US Agriculture Department estimated Vietnam's coffee output from October 2006-September 2007 crop year would rise 12.6 percent to 13.85 million 60-kg bags, or 831,000 tonnes. Vietnam has yet to give any estimates of its next crop.