Vietnams key coffee growing areas have reported defects involving black beans in 15 percent of their output, a record high, because of unseasonal rains, an industry official said. "The unseasonal rains falling during the harvesting time have worsened the quality," Luong Van Tu, chairman of the Vietnam Coffee and Cocoa Association, told Reuters after a visit to Daklak province, which produces a third of Vietnams coffee.
He said the 15 percent rate estimate was based on combined outputs from Daklak and its neighbouring province of Dak Nong in the Central Highlands coffee belt. Tu said the beans counted as defects could not be exported and were used only for domestic consumption, reducing Vietnams exportable robusta volume during the 2008/2009 coffee year ending September. In London, front-month May contracts edged up 0.46 percent to $1,528 per tonne at 0910 GMT after a fall of 2.4 percent the previous day to $1,521 a tonne. Coffee prices in Vietnam often reflect changes on London a day later.
Daklak picked about 400,000 tonnes of beans while Dak Nong had around 130,000 tonnes in the October 2008 to January 2009 harvest, together making 55 percent of Vietnams output. Traders said this month that exporters have been struggling with poor quality beans while trying to complete loading.
"After Tet the number of black beans has risen," said a trader with a foreign firm in Ho Chi Minh City, referring to Vietnams lunar new year festival that fell in January. "The quality is getting worse due to the rains. Any cargo which doesnt pass our quality control cant be delivered to our warehouses," a dealer in Singapore said. The Ho Chi Minh City-based trader said there were Daklak coffee cargoes delivered to Ho Chi Minh City for loading but which were rejected and returned to the exporters home town.
"As such that has raised the shippers cost and caused a delay to the shipment," he added. Traders said there was demand for lower quality products, mostly for the market inside Vietnam, while a few companies may sign deals with a content of as high as 25 percent black beans, instead of the usual 5 percent black and broken beans.
The coffee association has revised its estimate of the latest harvest to 16 million bags, down nearly 6 percent from the 17 million bags estimated in December, Chairman Tu told Reuters in February. He said on Wednesday that unseasonal rains in October and November last year also triggered early flowering, at least three months before usual. "The flowering was too early and that will affect the output of the next harvest," Tu said on the sidelines of a news conference in Hanoi. He had been to Daklak last Friday to address a coffee quality conference.