Coffee prices in Vietnam, the world's largest exporter of the robusta grain, extended their gains this week, supported by thin stocks and firm prices in the London market.
Indicative offers for Vietnamese beans grade 2, 5 percent black and broken rose to 21,200 dong ($1.33) a kg on Tuesday from 20,700 dong a kg on Monday and around 20,500 dong last week, traders said on Tuesday.
The benchmark London November contract closed up 4.7 percent at $1,535 a tonne on Monday after rising nearly 5 percent to hit a high of $1,541 in the session.
"You can offer any price you like, but it is still impossible to buy anything this week," said a trader in Buon Ma Thou, the capital of the top coffee-growing province of Daklak.
He said his firm was lasting able to buy 30 tonnes of robusta beans last week at 20,600 dong per kg but has bought nothing since then. Prices rose to 21,200 dong per kg this week. Traders said they had stopped offering new spot quotations for exports since last on Thursday, as they could not secure supply for new contracts.
Traders said prices had been on the rise since climbing to their highest level in seven years last on Friday to $1,370 a tonne free on board at Saigon Port.
Prices in Vietnam hit $1,400 a tonne on April 2, 1999. Prices fell gradually until they reached $290 in October 2001, when world prices plumbed 30-year lows.
This week, the Finance Ministry forecast coffee prices would continue to rise due to low domestic stocks and robust export demand. "Domestic prices are very likely to keep increasing until October, before the beginning of the next harvest," the ministry said in a report. Tight supply is expected to haunt the robusta coffee market until October.