Vietnamese coffee prices eased slightly this week in line with London futures market before sales could pick up early next year when growers unload beans to prepare for the Lunar New Year, traders said on Tuesday. Stocks of fresh beans are plentiful now as farmers have harvested around 80 percent of the 2011/2012 crop in the Central Highlands coffee belt.
The harvesting would end in the first half of January, before the lunar new year arrives on January 23. "The main activity is only on domestic markets as some speculators are buying for stocking, while foreign buyers are still away for holidays," a trader in Ho Chi Minh City said.
Robusta prices fell 1.7 percent to 38.5-38.6 million dong ($1,831-$1,836) a tonne on Tuesday in Daklak, Vietnam's main growing province, from 39.0-39.4 million dong a week ago.
Prices in Vietnam are on par with London's March contract , which lost $27 to end at $1,831 a tonne on Friday.
Premiums of Vietnamese robusta grade 2, 5 percent black and broken beans widened to $50 a tonne to London's March contract on Tuesday from $30-$40 a week ago, and bids also rose to a premium of $40 a tonne, from $15-$20 last Tuesday.
The premiums placed the beans at between $1,871 and $1,881 a tonne, free-on-board basis, down from $1,898-$1,908 last week.
Traders said Vietnamese farmers were expected to release some stocks before Tet, the country's largest festival to mark the lunar new year. "Most farmers are still holding on to their stock, but some could start selling a bit next month," a dealer said.
The coffee market, among all other markets in the Southeast Asian nation, will close from January 22 to January 26 for Tet, but normal trading is expected to resume after the weekend ending January 29.
The slowing export from Vietnam, the world's largest robusta producer, could help support domestic prices for a while, traders said. Vietnam's coffee exports in December fell an estimated 26.8 percent from a year ago to 120,000 tonnes, or 2 million bags, in line with market expectations, the Agriculture Ministry said on Monday.
Traders have estimated between 110,000 tonnes and 150,000 tonnes could be loaded from Vietnam this month. The export revenues this year would jump 45.35 percent from 2010 to $2.69 billion, or an average FOB price of $2,206 a tonne, the agriculture ministry said in its monthly report, suggesting a 46.7 percent rise from last year's average price.
The United States, Germany, Belgium, Italy and Spain top the list of Vietnamese coffee buyers in 2011, with Belgium replacing Spain as the third-largest buyer, the ministry's data show.